Iran says Oman deal nears completion but insists US must act first to reopen Hormuz

Iran said on Sunday that a deal with Oman establishing new shipping lanes through the Strait of Hormuz has entered its final stages, though Tehran maintained the critical waterway will remain closed until Washington satisfies a broader set of conditions tied to the ongoing standoff between the two countries.

A US official told Reuters on Friday that an agreement between Iran and Oman appeared close and could soon lead to the reopening of the strait, a passage that carried roughly a fifth of global oil and liquefied natural gas shipments before Iran shut it down in response to American and Israeli military strikes earlier this year.

Iranian Foreign Minister Abbas Araqchi confirmed on Sunday that negotiations over the strait, which sits between Iran and Oman, had reached their final stages. However, he repeated comments made a day earlier stressing that the waterway would not reopen unless additional conditions set by Tehran were met first. Iran’s Mehr news agency quoted Araqchi as saying the emerging agreement would establish the new shipping lanes to be used once the United States fulfils those conditions and the strait formally reopens.

Araqchi said Iran and the United States are not currently engaged in direct talks and that Tehran has no plans to begin them as long as Washington continues to breach an interim agreement the two countries signed in June. He added that messages between the two sides are being exchanged through intermediaries rather than direct contact.

Iran demands compensation and sanctions relief

The United States launched air strikes against Iran in late February, saying the campaign aimed to prevent the Islamic Republic from acquiring nuclear weapons or using missiles and regional proxy forces to threaten the wider Middle East. Washington and Tehran agreed to a ceasefire in June, but the United States reimposed a blockade on Iranian shipping in the Gulf in July, a move Iran characterised as a violation of a truce that had already shown signs of collapse.

A US official, speaking to Reuters on condition of anonymity, said the blockade on Iranian ports would lift once a deal restoring unimpeded commercial shipping is formally announced. The official added that any American actions would remain directly tied to Iran fulfilling its own commitments under the emerging agreement, pointing to a carefully sequenced approach that both sides appear to be navigating cautiously.

The arrangement under discussion appeared, according to sources who previously spoke to Reuters, to grant Tehran a degree of control over vessels entering the Gulf through the strait, an arrangement that shipping industry sources have said would be difficult to implement in practice.

The precise current status of the agreement remained unclear on Sunday, and Iran’s latest statements suggested several additional factors could still complicate its finalisation. Araqchi said the strait’s reopening would depend in part on the United States providing compensation to Iran for what Tehran describes as widespread attacks on its territory and interests.

Mohammad Baqer Zolqadr, secretary of Iran’s top national security body, outlined a broader list of demands, including an end to US threats against Iran, a halt to what Tehran calls aggression against its allies in Lebanon, the Palestinian territories, Yemen and Iraq, the lifting of the shipping blockade and broader sanctions, and the release of frozen Iranian financial assets.

Supreme Leader’s condition remains unclear

Ultimate decision making authority in Iran rests with Supreme Leader Mojtaba Khamenei, who has not appeared in public since an air strike killed his father and predecessor on February 28, the first day of the joint US and Israeli air campaign against Iran. State media reported on Sunday that Iranian President Masoud Pezeshkian met with Khamenei in late July, and a paramilitary leader promised that footage of the supreme leader would soon be released publicly. Khamenei was reportedly injured in the same strike that killed his father, according to earlier reporting.

Separately, the United Arab Emirates said on Saturday that Iran had attacked a vessel affiliated with its state oil company. Iran did not immediately respond to the allegation. The country’s powerful Revolutionary Guards have attacked commercial vessels in the past, arguing that ships transiting the strait without coordinating their passage with Iranian authorities are not protected from such action.

Houthi attacks widen regional shipping crisis

Iran’s strikes on shipping in the Strait of Hormuz have coincided with intensified attacks from its Yemen based allies, the Houthis, who have targeted vessels at a separate chokepoint located between the Red Sea and the Gulf of Aden on the opposite side of the Arabian Peninsula.

The Houthis declared a naval blockade against Saudi Arabia in the Red Sea last month, framing the move as retaliation for what they described as a Saudi imposed siege in Yemen, an accusation the Saudi government has firmly denied. Riyadh continues to back Yemen’s internationally recognised government in the country’s ongoing conflict.

The group claimed responsibility for an attack on Saudi Aramco’s Jazan refinery on Sunday, coming just two days after the kingdom signed a defence pact with fellow Sunni Muslim majority nations Turkey and Pakistan amid growing concern over regional instability stemming from the US and Israeli military campaign against Shiite led Iran.

Saudi Arabia’s energy ministry confirmed that a fire broke out at the refinery following the attack but was later extinguished without causing any injuries, and that authorities were continuing to manage the aftermath of the incident. The ministry did not specify a cause for the blaze.

Houthi military spokesperson Yahya Saree said on social media platform X that the group used a drone to strike the facility. The Houthis have targeted Aramco sites in Jazan before, a refinery that processes approximately 400,000 barrels of crude oil daily in southwestern Saudi Arabia.

It remains unclear whether or to what extent Pakistan or Turkey would participate in any Saudi response to the latest attack. Turkish Foreign Minister Hakan Fidan said the newly formed alliance between the three countries was not directed against Iran or any other nation, describing it instead as a general commitment to regional security. Fidan added that the allied nations would determine through consultation what degree, form and type of support they would provide one another in the event of any future attack.