Amman talks on Hormuz reopening cover 21% of global oil trade

Foreign ministers from Egypt, Turkey, Pakistan and Saudi Arabia met in Amman to ease regional tensions, with Strait of Hormuz security — the waterway moving about 21 percent of global oil trade — topping the agenda, Iran's state broadcaster IRIB reported.

The push follows the US-Iran memorandum of understanding, whose implementation — "including ensuring freedom of navigation in the Strait of Hormuz, preserving regional security, safeguarding the gains achieved, and strengthening regional stability" — is essential, Qatar's foreign ministry said on X after its prime minister met Egypt's foreign minister in the Jordanian capital.

The talks come as Iran and Oman inch toward a deal to reopen the strait, with ships entering the Persian Gulf through an Iranian-controlled route and exiting through an Omani-controlled route, two regional officials told the Associated Press. The US and Iran have confirmed a peace accord signing set for Friday in Geneva.

The strait carries roughly 20 million barrels a day, about a fifth of global oil consumption. A prolonged closure would spike crude prices and feed inflation expectations across energy-importing economies in Asia and Europe, complicating central bank policy just as disinflation takes hold.

Reopening plan takes shape

Iran and Oman's emerging agreement would split traffic between the two routes, a structure designed to give both governments a stake in keeping the waterway open. The arrangement follows months of disruption that began after the US-Iran conflict escalated, with tanker traffic and war-risk insurance costs swinging with each escalation. The last major threat to the strait came in 2019, when attacks on tankers in the Gulf prompted insurers to raise premiums and briefly pushed Brent above $70 a barrel.

The four-minister meeting widens the diplomatic circle beyond the direct parties, bringing in Pakistan — which borders the strait's approaches — and Saudi Arabia, the region's largest crude exporter and a key beneficiary of restored navigation. Egypt's presence links the talks to the Suez Canal corridor, where shipping diversions during the conflict raised freight costs and lengthened voyages for European and Asian buyers. Turkey, a major importer of Gulf crude, has a direct stake in keeping the waterway open and has positioned itself as a mediator across the region.

The Amman gathering sits alongside a broader regional push to stabilize the Gulf. Arab and Muslim ministers meeting in the same city this week condemned Israeli escalation in Jerusalem and launched a coordinated diplomatic campaign, while Washington separately lifted sanctions on Iraq's Fly Baghdad airline after a review found its operations no longer warranted the designation. The moves point to a wider de-escalation effort that extends beyond the strait to the wider Levant and Gulf.

What a reopening means for markets

Oil markets have priced a partial recovery in recent weeks as diplomatic channels reopened, but the risk premium remains elevated. A successful reopening would ease supply-disruption fears and likely pull crude prices lower, while a breakdown in talks would revive the worst-case scenario for energy traders. The Geneva signing on Friday is the next milestone; ministers from the four countries are expected to keep pressing for full restoration of navigation rights and removal of remaining restrictions.

For importers in Asia and Europe, every week of uncertainty adds to hedging costs and freight premiums, a drag that would lift consumer fuel prices and pressure inflation targets. The transmission runs through the barrel: higher crude feeds diesel and jet fuel, then goods prices, then core inflation — a chain that would force central banks in India, Japan and the euro area to reassess easing paths. A clean reopening, by contrast, would remove a persistent upside risk to oil and give disinflation room to continue, supporting equity valuations in energy-importing markets and easing pressure on currencies that weakened during the disruption.

This article is for informational purposes only and does not constitute investment advice.