Iran's deputy foreign minister said the agreement being drafted with Oman does not amount to reopening the Strait of Hormuz, and that putting it into effect would require a separate decision by Iran's senior leadership.
That is the second condition attached to this deal in two days, and it is a larger one than yesterday's.
Brent crude traded near $81 a barrel on Thursday morning, up about 2%, with WTI near $76.20, up about 1.4%. Both remain down roughly 12% on the week, and the market is now taking some of that back.
One correction to our own reporting. We quoted Brent at $78.75 intraday on Wednesday afternoon and described it as having given back its morning gain. It rallied into the close and settled at $79.45, up 0.11% on the day. That was still Brent's first close below $80 since July 13. WTI settled at $75.22, down 0.73%.
The Deal Is Not the Opening
Kazem Gharibabadi, speaking to the state news agency IRNA, described the understanding as nearing its final stage. Then he described what it is.
It is a new routing model under which much of the transit runs through Iranian territorial waters. It does not signify a full reopening. And implementation would require a separate decision by Iran's senior leadership, meaning the document now in drafting is not itself the thing that opens the waterway.
He also put a duration on it: two to four months, or longer.
That does not match the leak. Axios reported on Wednesday, citing a US official and regional sources, that the arrangement runs 60 days and is extendable. Gharibabadi's floor is roughly the same and his ceiling is double it. Both statements are on the record. Nobody has published a text that would settle which is right.
On Wednesday, Iran said the coordinates were agreed and the strait stays closed anyway. On Thursday, Iran said the agreement itself would not reopen it. The concession keeps arriving with the qualification already attached.
The President Says He Cannot Reach the Supreme Leader
Every version of this deal ends at the same signature. Supreme Leader Mojtaba Khamenei and the Supreme National Security Council have to approve it.
Khamenei has not appeared in public since he succeeded his father. No video, no audio.
On Wednesday, President Masoud Pezeshkian was asked about him on Iranian state television. He said contact with the Supreme Leader is "very difficult" at the moment, while adding that his presence is "a very great source of strength."
Read that plainly. The president of Iran said on state media that he is having trouble reaching the one person whose approval this agreement requires.
Whether that approval has already happened is genuinely unresolved. Axios reported Wednesday, citing a US official and a regional source, that Iran's leadership completed the approval process on Tuesday. The Associated Press reported that Khamenei had not approved as of Wednesday. Those are two wire services describing the same question in opposite terms within a day of each other, and neither is checkable from outside Tehran.
Oman Has Not Confirmed Any of This
Here is the gap in the story that has gone largely unmentioned, and it is the one we would most want closed before treating any of this as settled.
There is no Omani confirmation of anything.
Muscat has not confirmed the coordinates, the joint statement, the duration, the routing or the fee structure. Every detail that has reached print about this agreement is sourced to Iranian officials, Iranian state media, or Western reporting on leaked drafts. One of the two parties to a bilateral agreement has said nothing about it publicly.
That does not mean the talks are fictional. Multiple governments describe them as real, and Oman has been the channel since June. But an agreement described entirely by one side is a weaker thing than it appears in a headline, and readers should hold it that way until Muscat speaks.
A Senior Adviser Ruled Out the Route on the Same Day It Was Announced
Mohsen Rezaei, military adviser to the Supreme Leader, said on Wednesday that Iran "will under no circumstances allow any route through the Strait of Hormuz other than Iran's route to be opened."
The deal announced that same day routes outbound traffic through Omani waters.
We are not going to resolve that for you, because it cannot be resolved from the outside. Rezaei may be describing a red line the draft already satisfies, since the leaked terms put inbound traffic in Iranian waters. He may be positioning against a concession he opposes. He may not speak for the file at all. But an adviser to the man who has to sign the agreement publicly ruled out a route on the day the agreement containing it was announced, and no Iranian official has reconciled the two.
The Revolutionary Guard, which was not in the negotiating room, has still said nothing about the deal. Reporting from Critical Threats places its commander-in-chief at the head of the faction opposing concessions, a faction it describes as having consistently won policy arguments since the war began.
The Wednesday Announcement Did Not Come
Axios reported an announcement was expected Wednesday. Wednesday passed with no announcement.
Trump said Thursday that a lot of progress had been made and suggested something could come soon. He offered no new date. His account of how this started, given to Fox News, was that Iran "called me and they said, please don't do it, let's talk."
There has been no US strike and no new American military action since Wednesday. The naval blockade remains in force. On the Iranian side there has been no missile launch and no drone attack on Gulf basing.
Both sides are holding still. Neither has moved toward the other.
Two Transit Counts That Cannot Be Compared
This is worth slowing down on, because the numbers circulating today invite a specific and serious error.
Lloyd's List Intelligence counted 84 transits through the strait in the week to August 2, up from 45 the week before. It counts cargo vessels above 10,000 deadweight tonnes, it publishes no pre-crisis baseline, and it says openly that extensive dark activity makes total traffic difficult to quantify.
The IMF's PortWatch recorded 2 transits on August 2 against a pre-crisis baseline of 73 vessels a day.
Both are real. They are not comparable. Lloyd's 84 a week is about 12 a day. Setting that against PortWatch's 73-a-day baseline would overstate recovery by roughly seven times, because the two series count different vessels by different methods. We flagged exactly this class of error on our reference page on oil data traps, and this is a live instance of it.
What can be said without mixing series: Lloyd's own week-on-week figure nearly doubled, from 45 to 84. Reuters reports Gulf crude and condensate exports were largely steady in July and remain about 40% below pre-war levels. There is no transit count published for today.
One more caution on this file. The most recent attributable war-risk insurance quote is still the 7.5% to 10% of hull value that Marsh gave on July 22. That is now more than two weeks old and predates every attack in the Musandam cluster. Anyone quoting it as today's rate, including us until now, is quoting a fortnight-old number.
The Bypass Route Is Being Attacked
About a quarter of non-Iranian traffic has been using the Omani coastal route rather than the strait proper. Since August 1, two ships on that route have been struck and a third was the subject of an attempted attack. One of them was an LNG carrier.
The UK Maritime Trade Operations issued three products on Wednesday. One confirmed the uncrewed-vessel attack that sank a ship off Al Mukha in the Red Sea. One recorded an explosion close to a tanker 95 nautical miles southeast of Aden. The third reported two explosions near a tanker nine nautical miles southeast of Kumzar, on the Omani coast.
That third one has since been downgraded. UKMTO reclassified it from an attack to an advisory after a review determined the intended target could not be conclusively identified. Some outlets are still running it as an attack. It is not currently classified as one.
The Minoan Pioneer, the bulk carrier struck northeast of Khasab on Sunday night, is still where it was. Satellite analysis published Wednesday evening found black smoke still coming from the bow, no sign of any salvage or tow, and no fuel leak. Its third engineer is still missing, five days on. Nobody has claimed the attack, and no government has attributed it.
The same satellite pass found no ships at all using the Omani coastal route at that moment.
Iran's Oil Is Piling Up Offshore
The clearest measure of what the blockade is doing is not a transit count. It is inventory.
About 135 million barrels of Iranian crude are sitting in floating storage, up 14% in a month, according to Vortexa figures reported Wednesday. Fifty laden vessels were idling along the Iranian coast as of Tuesday, against 45 a week earlier and 36 when the blockade was reimposed on July 14.
Iranian Light is discounted about $4 a barrel under Brent, narrowed from roughly $5 a week ago.
Oil that cannot move accumulates on the water. That series has gone one direction for three weeks.
We have no observation of the Kharg Island anchorage dated Wednesday or Thursday. The figures above are Tuesday's.
Aramco Told Its Buyers to Plan for a Closed Strait
Saudi Aramco published its September official selling prices early Thursday, and the pricing is the smaller half of the story.
Arab Light to Asia was cut 50 cents to $2.00 below the Oman and Dubai average, the lowest since June 2020. After August's $11.00 cut, the largest single-month move in Reuters records back to 2003, a 50-cent trim is close to a hold.
The grades split. The lights were cut. The heavier grades were raised: Arab Medium up $1.25 to $2.00 below the benchmark, Arab Heavy up $1.25 to $3.35 below. That compresses the light-heavy spread sharply, and it is a considerably calmer set of decisions than last month's.
The operational instruction that came with it is the part worth reading twice.
Aramco asked Asian customers to nominate their September cargoes by August 7 from Ras Tanura, which sits inside the Gulf and behind the strait. It also asked them to submit alternative nominations from Yanbu on the Red Sea or Sidi Kerir on the Mediterranean, in case the strait remains closed. Only Arab Light is offered at those alternate terminals, in limited volume.
The world's largest crude exporter is asking its buyers to file a backup loading plan for a strait that is supposedly days from reopening. It did that on the same morning Tehran said the agreement would not reopen it.
For context on the benchmark those prices are set against, Dubai cash premiums averaged $1.26 a barrel in July, down from $2.39 in June. Aramco also cut its prices to Northwest Europe, the Mediterranean and the United States, though no figures for those regions have been published.
The Curve Says Something the Flat Price Does Not
Brent is in backwardation, meaning nearer barrels cost more than later ones, which is what a market does when physical supply is tight now.
That structure steepened on Thursday rather than relaxing. The spread between October and January widened from $3.75 at Wednesday's settle to $4.49, a 74-cent move in one session. The rally is concentrated at the front: October gained about 1.9% while March gained about 0.7%.
Set that against the week. Flat price fell roughly 12% from Monday to Wednesday as the market priced a deal. The scarcity signal in the curve did not loosen by anything like the same proportion, and on Thursday it tightened.
One number from Wednesday's inventory report went almost entirely uncovered and points the same way. Commercial crude rose 2.5 million barrels, which is the bearish headline everyone ran. But total US crude including the Strategic Petroleum Reserve fell to 711.8 million barrels, the lowest since March 1984. Commercial stocks at 407 million are still about 6% below the five-year average. A build is not the same thing as a comfortable position.
Analysts are describing doubt rather than conviction. Tim Waterer at KCM Trade said traders still remember the short-lived memorandum signed in June, so there is understandable anxiety that any new deal could prove equally fragile. Roberto Cominotto at Julius Baer said Houthi attacks have not significantly disrupted supply so far, but that this might change if they escalate. Rob Thummel at Tortoise Capital put a number on the other side: if a deal is reached, oil could head toward $70.
Natural gas went the other way. The EIA reported a storage injection of 33 billion cubic feet for the week ended July 31, against a Reuters poll of 31 billion and a five-year average build nearer 23 billion. Henry Hub fell about three cents on the print to around $2.64. Working gas stands at 3,117 billion cubic feet, about 6.7% above the five-year average.
What to Watch
The Gulf official who told CNN the odds of an Iran-Oman deal were roughly even put the marker on Friday. That is tomorrow.
If a text appears, the questions that matter are the ones nobody has answered in three days of leaks: whether Oman confirms it, whether the Revolutionary Guard accepts it, whether Khamenei has actually signed, and whether the United States lifts the blockade that Tehran says must go first. A signed document that satisfies none of those does not move a barrel.
The EIA's next Short-Term Energy Outlook lands August 11. Its standing July forecast has Brent averaging $82 this year, which the past week has made look generous.
A caution on searching this story yourself, and one example is worth more than the rest.
An analysis headlined that Aramco's September official selling prices came in lower than expected, reporting Arab Light to Asia at $2.00, ranks well right now. It is from August 2024, and the 2024 figure was a $2.00 premium. The 2026 figure is a $2.00 discount. Same grade, same month, same magnitude, opposite sign, two years apart. A search summarizer handed that page to our researcher described as information about Aramco's September 2026 announcement. The tell is in its own body, which discusses an OPEC+ plan to unwind cuts from October, a 2024 storyline.
Three more in the same family. An EIA press release headlined that the agency was raising its global production forecast after the opening of the Strait of Hormuz is dated July 7, and that opening collapsed. A Marine Log piece headlined that Iran and Oman had released a joint statement on the strait is from June. A widely circulated story about Trump giving Iran a 48-hour deadline is from April 5. And a Morgan Stanley note cutting its Brent forecast to $75 on the thesis that a Hormuz reopening would create a glut is dated June 30, which is the most dangerous of the set because its argument is exactly this week's argument.
Iran has now attached three conditions to its own agreement in two days: that third parties do not obstruct it, that the American blockade lifts first, and that the leadership separately decides to implement it. Each was announced as progress.
This article is for informational purposes only and does not constitute financial or investment advice. Oil market conditions can change rapidly. Consult a qualified financial professional before making investment decisions.