Iran said Wednesday it has not reached an agreement with the United States on the Strait of Hormuz, dashing hopes for a near-term reopening of the waterway that carries about one-fifth of the world's seaborne oil.
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Iran rules out Strait of Hormuz deal, oil at $94 faces supply risk
Iran said Wednesday it has not reached an agreement with the United States on the Strait of Hormuz, dashing hopes for a near-term reopening of the waterway that carries about one-fifth of the world's seaborne oil.
Iran said Wednesday it has not reached an agreement with the United States on reopening the Strait of Hormuz, extinguishing hopes for a near-term resolution as WTI crude trades near $94 a barrel.
"No agreement has been reached with the US on the Strait of Hormuz," Ali Bagheri, deputy secretary of Iran's Supreme National Security Council, told Iranian media. Bagheri said Iran and Oman are consulting on a new mechanism for vessel passage through the strait, while indirect contacts with the US continue. He added that Iran's enriched uranium program is not on the negotiation agenda — a position that complicates any broader deal.
The comments came a day after US Secretary of State Marco Rubio warned the strait would be reopened "one way or the other" and the US military conducted self-defense strikes in southern Iran targeting missile launch sites and vessels placing mines. "The straits have to be open," Rubio said Tuesday. "They're going to be one way or the other."
The impasse threatens to keep the Strait of Hormuz largely closed for months, according to Piper Sandler, which said oil will hit new highs this summer as shortages become more urgent. WTI crude, which surged toward $120 a barrel after the US-Iran war erupted in late February, has since retreated to around $94 — a level that already embeds a significant risk premium.
Iran has restricted access to the strait since the United States and Israel attacked Iran on Feb. 28, igniting the war. The US retaliated with a maritime blockade of Iranian ports, cutting the country off from sea-based trade. Vessel traffic through the narrow passage has fallen sharply to near zero since the escalation, according to tracking data.
The diplomatic standoff has real-world consequences beyond oil markets. South Korea's Foreign Ministry said Wednesday that an attack on a cargo ship operated by HMM in the Strait of Hormuz earlier this month likely involved an Iranian anti-ship missile. Debris found inside the vessel showed components resembling those used in Iranian-made Noor or Qader missiles, the ministry said. Seoul plans to summon Iran's ambassador to protest the findings.
Iranian officials have pushed back against US characterizations of the talks. Ebrahim Azizi, head of Iran's Parliament's National Security and Foreign Policy Committee, outlined several mandatory confidence-building measures the US must implement before any agreement, including accepting Iran's control of the strait and lifting oil sanctions. Iran's foreign ministry has also said navigation through the strait "will have costs," defending fees it charges for navigational services and environmental protection measures.
The last time a major shipping chokepoint faced a prolonged closure — the 2019 attacks on Saudi Aramco's Abqaiq and Khurais facilities — oil prices spiked 15 percent in a single day before retreating as strategic reserves were released. This time, the stakes are higher: the Strait of Hormuz once carried about 21 percent of global seaborne oil, and no equivalent spare capacity exists to replace it quickly.
With indirect talks continuing and both sides hardening their positions, the market faces an extended period of elevated risk. The next milestone will be whether the US and Iran can agree on even a partial reopening — or whether the standoff deepens into the summer months when oil demand typically peaks.
This article is for informational purposes only and does not constitute investment advice.
[1] Iran says no agreement reached with US on Hormuz Strait[2] South Korea says attack on ship in Strait of Hormuz likely involved an Iranian...[3] Rubio: Strait of Hormuz to open 'one way or the other'[4] Strait of Hormuz closure chokes trade and aid for Afghanistan[5] Piper Sandler says Strait of Hormuz to remain closed for months and oil to hit...
