Iran’s Hormuz Draft Turns a Promised Deal Into a New Oil Shock

Iran’s Hormuz Draft Turns a Promised Deal Into a New Oil Shock
Iran’s draft rules for the Strait of Hormuz have transformed expectations of an imminent shipping deal into a fresh test of control over one of the world’s most important energy chokepoints. The proposal would restrict access for U.S. and Israeli vessels while threatening penalties for other countries Tehran says have harmed it.

The immediate market reaction was sharp. Brent crude rose 3.8% to $82.49 a barrel, while West Texas Intermediate gained about 2.8% to $77.29, reversing an earlier decline fueled by U.S. assurances that a deal could soon restore freedom of movement. The contrast underscores the central dispute: Iran appears to view any arrangement as a regulated, conditional framework, while Washington wants a route without political or financial barriers.

Iran and Oman are reportedly discussing a system in which inbound ships would use Iranian waters and outbound traffic would pass through Omani waters. But the draft, published by Iranian state media and still under parliamentary review, would ban U.S. and Israeli ships and block vessels linked to countries that have not paid compensation. Violators could face penalties equal to 20% of their cargo’s value.

The disagreement is also rhetorical. Iran’s top negotiator accused President Donald Trump of “theater diplomacy,” rejecting Washington’s portrayal of talks as nearly complete. Trump’s administration, meanwhile, has insisted that any temporary routes must involve “no approvals or permissions and no tolls or charges.”

The security backdrop makes compromise harder. Only two vessels crossed Hormuz on Wednesday, compared with a pre-war baseline of roughly 130 to 140 daily transits, while traffic through the Bab el-Mandeb also collapsed. Even if Tehran and Muscat reach a framework, the competing demands—and the risk of further regional attacks—suggest that reopening the waterways will be far more difficult than announcing a deal.