Trump says Hormuz 'somewhat open' as Brent steadies near $79

President Donald Trump said the Strait of Hormuz is "somewhat open" but no formal reopening deal has been concluded, leaving Brent crude near $79 a barrel as traders weigh partial diplomatic progress against unresolved supply risk, according to CCTV.

"The strait is somewhat open at present," Trump said, adding that the US is participating in related negotiations with "generally positive" progress, per CCTV. The remarks came as Qatari mediators confirmed a draft US-Iran deal is circulating among international stakeholders, with Iranian and Omani representatives reporting "positive" progress toward securing safe passage through the waterway.

Brent crude crossed $79 on Aug. 5 after Iran and Oman agreed on a shipping route through the waterway, extending a slide from an intraday peak of $82.87 reached when Iran proposed barring US- and Israeli-linked vessels from the strait. The Iranian Consulate in Mumbai said the draft proposal remains under expert review. An Indian commercial vessel sank off Yemen's coast after a projectile strike, with all 14 crew members rescued, according to maritime sources.

The Strait of Hormuz handles roughly 20 percent of global oil consumption, making any disruption a direct transmission channel to crude benchmarks and, ultimately, retail fuel prices. A formal reopening agreement would likely strip the geopolitical risk premium from Brent, while a breakdown in talks could push prices sharply higher. UAE-based carriers Emirates, Etihad Airways, flydubai and Air Arabia continue to face cancellations and delays as airspace restrictions remain fluid.

Iran's Draft Proposal and Regional Escalation

Iran's draft proposal, shared by its consulate in Mumbai, would bar vessels belonging to the US, Israel and other countries designated as "hostile" from transiting the strait, and restrict ships or cargo that have participated in actions against the "Axis of Resistance." The proposal also envisages fines of up to 20 percent of a vessel's cargo value for violations, with the Iranian government coordinating with armed forces to oversee maritime navigation. The draft remains at the expert review stage, with Iran's parliament inviting specialists and stakeholders to submit recommendations before legislative action, the consulate said.

The diplomatic push follows weeks of heightened tension in the region. Iran-backed Houthi forces killed at least 30 Saudi-aligned Yemeni troops in attacks on military camps in Marib and Hadramout provinces, according to Reuters, with the group claiming missile and drone strikes on Saudi deployments. The attacks show the fragility of the broader security environment even as the main US-Iran track shows signs of progress.

What a Full Reopening Would Mean for Prices

The last major disruption to Hormuz traffic came in 2019, when attacks on tankers off the UAE coast briefly spiked Brent above $75 and triggered a surge in war-risk insurance premiums for vessels transiting the Gulf. The current episode has already forced airlines to reroute flights and pushed shipping insurers to reassess coverage for the region.

For energy markets, the stakes are clear. Brent's slide from $82.87 to $79 reflects the market pricing in a partial normalization of flows, but the absence of a formal agreement leaves the risk premium intact. If talks collapse, traders could quickly reprice the strait's closure risk, pushing Brent back toward $85 or higher. If a deal is finalized, the next question becomes how quickly tanker traffic normalizes and whether war-risk premiums unwind.

The economic ripple extends beyond crude. Oil is a fundamental input for transportation, manufacturing, electricity generation, chemicals, plastics, agriculture and logistics, so sustained price increases feed into the wider economy. UAE residents, who have been watching domestic fuel prices adjust to the regional situation, await indications on when pump prices will normalize.

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