Hormuz draft deal offers fragile route back for trade finance

Iran and Oman are finalising a proposed shipping arrangement for the Strait of Hormuz, offering a possible route towards restoring trade flows through the waterway while leaving substantial security, insurance and financing risks unresolved.

Iran’s foreign ministry said the agreement had reached the final drafting stage. The proposal is expected to depend partly on the United States lifting restrictions affecting Iranian ports, meaning an Iran-Oman understanding would not by itself guarantee the resumption of unrestricted navigation.

Reported terms would establish an inbound shipping lane closer to Iran and an outbound route nearer Oman. Iran would have a role overseeing vessels entering the Gulf but would not be permitted to impose tolls or service charges.

The draft has reportedly been shared with the United States, regional governments and senior Iranian decision-makers. Final political approval has not yet been confirmed.

Any workable arrangement would be commercially significant. Before the war, approximately one-fifth of global oil and natural-gas supplies passed through the strait, making disruption a direct concern for commodity traders, shipping companies, insurers and the banks financing cargoes.

Traffic has begun to recover from its lowest levels but remains heavily depressed. Lloyd’s List Intelligence recorded 84 transits between 27 July and 2 August, compared with 45 in the previous week. A typical pre-crisis week recorded more than 700.

The security position also remains unstable. At least two Greek-controlled vessels were reportedly struck during the preceding week, while other ships received warnings or reported near misses.

For trade-finance providers, a political agreement would not immediately remove the operational risks surrounding individual transactions. Banks and insurers will need evidence that agreed shipping lanes are secure, consistently available and recognised by the principal military and maritime authorities.

Documentary credits may also require amendments where shipment dates, ports, routes or insurance conditions have changed. Importers facing delayed cargoes remain exposed to additional freight, inventory and financing costs even if passage gradually resumes.

Oman and Iran had previously committed to continued discussions on safe passage and future navigation arrangements. The latest draft represents progress beyond that earlier framework, but lenders should avoid treating it as a completed reopening until traffic normalises and the security provisions are tested in practice.