Strait of Hormuz Management Plan Stalls; Shipping Corridor Remains Vulnerable

WHAT BLOCKED THE IRAN-OMAN STRAIT DEAL AND WHAT COMES NEXT

A framework to manage shipping lanes through the Strait of Hormuz collapsed this week despite coming within reach of completion, leaving the critical waterway subject to continued tensions and the risk of further escalation.

According to four regional officials and one senior U.S. official, Iran and Oman had negotiated the arrangement by midweek. Incoming ships would use a lane closer to Iran; outbound vessels would travel a lane closer to Oman. No tolls would be charged. The strait would undergo demining operations. Critically, the deal would have restarted a 60-day clock to bring the United States and Iran back to broader cease-fire and nuclear negotiations, addressing frozen assets and permanent solutions to strait management.

The proposal carried backing from Gulf Cooperation Council members, even though the arrangement theoretically allowed Iran to block their imports. Senior Gulf officials acknowledged they had no alternative because they feared that if the U.S. escalated military action against Iran, the regime would retaliate against cultural and political targets in their own countries. During a call with Saudi Crown Prince Mohammed bin Salman, the crown prince conveyed what a senior regional official described as a “nightmare scenario” about the risks of regional escalation and its impact on global energy supplies. That conversation persuaded President Trump to pursue the deal by midweek, and U.S. officials believed they had secured an agreement that would unlock broader negotiations.

Then the framework fell apart.

A senior U.S. official and three Arab officials stated that Iranian negotiators initially agreed to the temporary arrangement, but members of the Islamic Revolutionary Guard Corps intervened and introduced new requirements. The IRGC demanded explicit U.S. commitments to lift the blockade, remove sanctions, restore Iran’s ability to sell oil in dollars, and add toll provisions to the agreement. Each condition moved the goalposts well beyond what had been on the table.

Behnam Ben Taleblu of the Foundation for the Defense of Democracies characterized the pattern as familiar: “We have seen this movie from the Islamic Republic before, where you think a deal is close or imminent or at hand, and, last minute, the parameters change and the government asked for more.” He attributed the breakdown to the regime’s belief that escalation rather than engagement ensures its survival, and that its near-term diplomatic strategy aims to punish the Trump administration rather than establish working arrangements with it.

Iran’s chief negotiator Mohammad Ghalibaf offered a different account, accusing the United States of “theater diplomacy on loop” and demanding that Washington “acknowledge the facts, fulfill your commitments.” The facts, in Iran’s view, refer to U.S. sanctions imposed recently against the country.

Ali Vaez of the International Crisis Group rejected the notion that internal Iranian divisions between pragmatists and the IRGC prevented the deal. He argued instead that the Revolutionary Guards hold decision-making authority. He suggested that if only Iran and Oman were involved, an agreement would have been finalized weeks earlier, but because the United States and Arab Gulf states stood behind Oman, they effectively controlled the negotiating terms. Both analysts agreed on one point: Iran is playing for time and believes time favors its position.

Meanwhile, three regional powers moved in a different direction. Saudi Arabia, Turkey, and Pakistan signed the Mecca Joint Defense Agreement, bringing together Saudi Crown Prince Mohammed bin Salman, Turkish President Recep Tayyip Erdogan, and Pakistani President Shehbaz Sharif. The pact pledges to treat an attack on any member as an attack on all, mirroring NATO’s Article 5 framework. None of these nations are weakening ties to Washington, but regional officials express doubts about U.S. leadership, concerns accelerated by the ongoing Iran conflict and the assessment that Iran’s regime will survive and emerge more emboldened, with increased leverage over the strait.

Whether a revised strait arrangement can be negotiated before that leverage grows further is the question now hanging over every ship transiting the waterway.