Brent crude fell below $90 a barrel after Iran and Oman moved closer to an arrangement aimed at restoring safer passage through the Strait of Hormuz, easing some of the market's immediate fears over disruption at one of the world's most important energy chokepoints. The discussions cover a temporary joint shipping corridor and a joint mine-clearing project, while Washington has so far stopped short of broad secondary sanctions on Iran's trading partners.
Iran and Oman outline a temporary transit corridor
Iran and Oman said in a joint statement on Tuesday that their foreign ministers had discussed a proposed framework to establish a “temporary joint navigation corridor” in the Strait of Hormuz and to put in place a “joint mine-clearing project.”
The statement said technical talks would continue, with the aim of reaching agreement on a permanent navigation corridor and the future management of the strait, including mechanisms for information-sharing, traffic management, and related navigation and safety services.
That suggests the talks have moved beyond a short-term reopening effort and into a broader discussion about how shipping through Hormuz would be managed going forward. For tanker operators, refiners and energy traders reliant on Middle East crude flows, a more stable passage through the strait would affect freight rates, delivery schedules and the geopolitical risk premium built into oil prices.
Vessel traffic remains well below recent norms
Even with the more constructive diplomatic signals, actual shipping activity through Hormuz remains subdued. Preliminary Kpler data showed only five commodity-carrying vessels passed through the strait on Tuesday, down from a 10-day average of 15.
Before the Iran conflict erupted, roughly one-fifth of global oil supply typically moved through the Strait of Hormuz. That is why even partial disruption in the waterway tends to ripple quickly across crude, refined products, shipping and marine insurance markets.
The latest vessel count suggests sentiment has improved faster than physical traffic. If a temporary corridor is finalized, markets will be watching whether transits recover quickly enough, which will depend on technical implementation, progress on mine-clearing and the credibility of maritime security arrangements.
Oil extends losses as risk premium fades
After the Iran-Oman statement, oil prices extended their slide from earlier in the week. Brent, the international benchmark, dipped below $90 a barrel overnight, reflecting a market reassessment of how severe and how prolonged any supply disruption through Hormuz may be.
A key shift this week has been a cooling in expectations for a further military escalation. If some shipping resumes through the strait, the geopolitical premium added during the conflict could continue to unwind, especially as traders increasingly price in a recovery in maritime traffic and possible progress toward a ceasefire.
US diplomatic signals calm markets, but ceasefire talk is unverified
Another factor weighing on oil has been the US decision to begin sending diplomatic personnel back to Gulf countries, a move markets have read as a sign that Washington does not currently expect a rapid renewed escalation.
At the same time, Russian outlet RIA Novosti reported late Tuesday that the US and Iran could announce a new ceasefire agreement in the coming days, including provisions on freedom of navigation in the Strait of Hormuz. The report cited Iranian and Pakistani sources, but the claim has not been independently verified, and the White House has not commented.
For markets, the significance of any ceasefire goes beyond the headline itself. The bigger question is whether shipping would be backed by enforceable security guarantees. Without formal terms, monitoring arrangements or maritime coordination, oil and shipping markets could still swing sharply on any fresh incident.
Bessent warns of tougher pressure, but broad secondary sanctions are still on hold
Before the latest signs of diplomatic and shipping de-escalation, US Treasury Secretary Scott Bessent said on Monday that Washington would launch an “economic D-Day” against the Iranian regime and threatened to widen pressure to Tehran's “backers” and trading partners to further constrain Iran's economy. The measures covered 60 individuals, entities and vessels.
So far, however, the US has not imposed the kind of sweeping secondary sanctions on other countries that would have broader market consequences. Of particular interest to traders is that Washington has not taken major action against Chinese financial institutions suspected of facilitating Iran-related oil trade.
Bessent said Monday: “Why would I blow up the global financial system? We think it is important to calibrate the timing first and give the relevant parties a remediation period, but they should know that action will be very quick, and we are serious.”
The remarks indicate that while the US is keeping the option of stronger economic pressure on the table, it remains measured in execution for now. For energy trade, shipping finance, dollar settlement and Asian buyers, that warn-first approach reduces the near-term probability of a broader financial shock and helps explain why oil has given back part of its recent gains.
China remains central to the outlook for Iranian crude
China buys about 90% of Iran's crude oil, making it one of the most important destinations for Iranian exports. That leaves the market focused on whether the US will expand economic pressure to countries that continue trading with Tehran, especially Chinese companies and financial channels tied to the oil trade.
A spokesperson for China's foreign ministry said Tuesday that if the US widens pressure on countries engaged in trade with Tehran, China “will take all necessary measures to firmly safeguard its legitimate rights and interests.”
That means the easing in sentiment linked to the Hormuz shipping talks does not resolve the wider standoff over Iranian oil flows, dollar clearing, shipping support and financial sanctions. Markets are likely to stay focused on three near-term questions: whether Iran and Oman can turn the temporary corridor into an operational arrangement, whether vessel traffic through Hormuz continues to recover, and whether the US ultimately extends secondary sanctions to major trading partners and financial institutions.