Hormuz deal moves closer, but Red Sea attacks threaten shipping recovery

Iran’s foreign ministry said Tehran and Muscat had reached an understanding on the geographical coordinates of a route through the Strait of Hormuz and were preparing a joint announcement.

The development is an important step towards reopening the waterway, which connects Gulf oil and container ports with the Arabian Sea. However, the proposed arrangement remains under review and does not yet amount to a return to unrestricted commercial navigation.

Among the unresolved issues are the level of control Iran would exercise over ships entering the Gulf, how outbound traffic would be managed and whether vessels could face transit or service charges.

Reports suggest that Iran wants to retain authority over at least part of the inbound route, while the United States has opposed proposals that would allow Tehran to charge compulsory fees or decide which ships can pass.

Iran and Oman have nevertheless described the talks as constructive, while oil markets responded to the signs of progress with modest price falls.

Shipping activity remains far below normal

Diplomatic progress has not yet translated into a significant recovery in vessel movements. Kpler data cited by Reuters showed that only two ships crossed the Strait of Hormuz on Wednesday, down from eight a day earlier. Before the current conflict, around 130–140 vessels typically passed through the strait each day.

Some vessels may not appear in conventional tracking data because ships operating in high-risk areas sometimes switch off their automatic identification systems. Even allowing for so-called dark transits, however, traffic remains far below normal levels.

Gulf oil exports averaged around 10.7 million barrels per day in July, approximately 40% below pre-war volumes. Ship attacks also increased, with 14 incidents reported during July, compared with eight in June.

The figures underline why shipping companies and insurers are likely to remain cautious even after a formal agreement is announced. A sustainable reopening would need to be reflected in regular ship movements, lower war-risk insurance premiums, the removal of blockades and the resumption of normal services by major carriers.

Red Sea route faces renewed threats

At the same time, conditions around the Red Sea and the Bab el-Mandeb remain unstable. The Houthis have claimed missile attacks against two Saudi oil tankers, including one near the Saudi Red Sea port of Yanbu and another in the Gulf of Aden. The claims had not initially been confirmed by Saudi authorities.

Traffic through Bab el-Mandeb, the narrow passage linking the Red Sea with the Gulf of Aden, fell to just one vessel on Wednesday, according to Kpler data. Twenty ships had passed through the route the previous day.

The Houthis have said they are enforcing a naval blockade against Saudi Arabia, accusing Riyadh of restricting Yemen. Saudi Arabia denies the allegation.

Saudi Arabia can move crude oil from the Gulf coast to the Red Sea through its East–West Pipeline, allowing cargoes to be loaded at Yanbu without passing through Hormuz. But attacks near the Red Sea port or Bab el-Mandeb could undermine that alternative.

Agreement would be a first step, not the end of disruption

A formal Hormuz arrangement could ease immediate fears over Gulf oil and shipping flows. But it would not by itself guarantee safe navigation or restore confidence among shipowners and insurers.

The practical test will be whether vessel traffic begins rising consistently, whether carriers restart suspended services and whether the cost of insuring voyages through the region falls.

Until that happens—and while attacks remain a threat in the Red Sea—European supply chains are likely to continue facing longer routes, higher costs and unpredictable cargo arrivals.