Iran and Oman settled the geographic coordinates of a proposed shipping route through the Strait of Hormuz on Wednesday, Iran's foreign ministry said, without reopening the waterway. It has been closed since late February, after United States and Israeli strikes.
The foreign ministry spokesman, Esmaeil Baghaei, said a joint statement from the two countries "outlining the main considerations and points agreed upon is also being reviewed and finalized". He said the arrangement covers technical, legal, security and environmental points.
Under the route as described, ships would enter the Persian Gulf through waters controlled by Iran and leave through waters controlled by Oman. That is the part both governments agree on.
What is not agreed is who pays. Iran has said it will levy charges for security and environmental management as the sovereign power over the northern approach. The United States and the Gulf states say passage through an international strait is free under the law of the sea and no toll is payable. Reporting on the emerging terms has differed on this point, with some accounts describing a fee and others describing free transit, which is a reasonable indication that it remains open.
Iran has also attached a condition that sits outside the shipping arrangement altogether. State broadcaster IRIB said the reopening "depends on a change in US behaviour and the correction of its violations", and Iranian officials have specified the lifting of the American naval blockade of Iranian ports and an end to strikes on Iranian infrastructure.
The two governments describe the American role differently. Baghaei called the United States a third party and said the talks "have nothing to do with the United States". President Donald Trump told Fox News the negotiations were moving along very nicely, and separately that "the Strait is going to be open very soon, or they are going to get hit very hard". Both statements were made this week.
An interim arrangement of about 60 days, with an option to extend, has been described by officials on the American side, tied to restoring the ceasefire that took effect on 17 June. Neither Tehran nor Muscat has confirmed that term publicly.
The strait carries roughly a quarter of the world's seaborne oil trade. Oil prices fell and equities rose on Wednesday as the prospect of a deal firmed.
For Australia the exposure is refined fuel, and it is already visible in the trade accounts. Bureau of Statistics figures released on Thursday show fuel and lubricants imports fell $935 million in June, down 11.9 per cent in a single month. The ABS does not separate price from volume in that series.
Australia is not party to any of these negotiations. The terms of transit through the strait, and the timing of any reopening, will be settled between Tehran, Muscat and Washington, and the cost of the outcome will reach Australian importers through a price they had no role in setting.
The strait remains closed. A joint Iranian and Omani statement is drafted but unpublished, and no reopening date has been set by any party.
