Negotiations over the Strait of Hormuz, a vital waterway for roughly one-third of the world's seaborne oil, are intensifying as the dispute over passage rights has become a core geopolitical flashpoint in the escalating conflict between the United States and Iran. Iran and Oman have engaged in recent, intensive talks aimed at establishing a new transit arrangement that would replace the operational model of the past six decades. However, Washington's firm stance on control and toll fees presents a major obstacle to any potential agreement. Simultaneously, Iran has issued clear warnings through high-level diplomatic channels to Persian Gulf states, designating critical energy infrastructure as potential targets for retaliation. Whether the strait can be fully reopened will depend on the final balance of competing interests. Overall, growing market optimism that the Strait of Hormuz will soon reopen has further eased inflation concerns, reducing expectations for a Federal Reserve interest rate hike. This has pressured the U.S. dollar and bond yields, providing upward momentum for gold prices. Spot gold surged over 4% on Wednesday, marking its largest single-day gain since February, and continued its rally in early Asian trading on Thursday (August 6). As of 09:45, it had risen 1.3%, touching a high of $4,302.45 per ounce, a level not seen since June 18.
Framework Emerges: Iran Nears Goal of Control Over Strait
Diplomatic efforts to resolve the issue of transit rights through the Strait of Hormuz are accelerating. Iranian Foreign Ministry Spokesperson Ismail Baghaei confirmed on August 5 that Iran and Oman have agreed on the geographic coordinates for a proposed shipping lane through the strait, with a joint statement in its final review stage. Iranian Deputy Foreign Minister Kazem Gharibabadi stated on the same day that the agreement between Iran and Oman regarding the passage of commercial vessels through the Strait of Hormuz is nearing completion. Under the reached consensus, a new transit model, distinct from the system of the past 60 years, will be established for the Strait. Both the southern route currently passing through Oman's territorial waters and the northern route within Iran's territorial waters are to be closed. The new designated lane will require commercial vessels entering the Strait of Hormuz and traveling part of the way out to pass through Iran's territorial waters. However, Gharibabadi emphasized that the new lane is also temporary, expected to be usable for two to four months. Two regional officials and one senior Iranian source revealed that this agreement would grant Tehran control over vessels entering the Gulf via the Strait of Hormuz – potentially one of the most significant concessions offered to Iran to date. Citing sources, the U.S. news website Axios reported that the interim agreement under discussion establishes a 60-day temporary arrangement, to be jointly implemented by Oman and Iran, with a possibility of extension. Notably, Iran has clearly stated that an agreement solely with Oman cannot fully ensure safe passage through the strait. Baghaei warned that the strait's security remains tied to the ongoing U.S. blockade and other "aggressive and threatening" actions against Iran. The Iranian Foreign Ministry spokesperson had previously emphasized that even if a deal is reached with Oman, the Strait of Hormuz will remain closed if the U.S. does not lift its blockade of Iranian ports and does not resume fulfilling the commitments of the previously agreed 14-point memorandum of understanding.
Dispute Over Tolls: 5%-7% vs. 3% vs. Zero Fee
As the layout of the shipping lane becomes clearer, the issue of passage tolls has become a central point of contention. According to reports, a senior Iranian official disclosed that Iran is seeking to charge vessels using the Strait of Hormuz a fee equivalent to 5% to 7% of the value of their cargo. Oman is reportedly discussing a lower rate of around 3%, while Washington insists that no fees should be charged at all. Analysts suggest that nominally setting the fee as a "voluntary payment" might help break the deadlock, but under the threat of potential Iranian attacks, most shipping companies would likely still feel compelled to pay to ensure safe passage. The U.S. position is clear on this matter. U.S. President Donald Trump stated unequivocally from the White House on August 3 that the U.S. would not allow Iran to charge fees on vessels transiting the Strait of Hormuz, saying, "If there are fees to be collected, we will collect them." A U.S. official familiar with the negotiations also indicated that any "temporary" routes established through the Strait of Hormuz do not require Iranian approval and will not involve tolls, adding that the U.S. still hopes to return to the status quo where "neither party controls the waterway or passage rights." The dispute over the definition of "control" is also prominent. A regional source stated that details still need to be finalized regarding the exact definition of "control." Gulf state negotiators insist that regional states should supervise vessel inspections and that any fee payments must be voluntary. The senior Iranian source mentioned that the current text of the agreement under discussion envisions Iran controlling vessels entering the Gulf via the strait, with one of the main disputes being the extent of Iran's authority over vessels traveling in the opposite direction.
Iran Issues Stern Warning: Energy Infrastructure Used as Bargaining Chip
Simultaneously with the diplomatic talks, Iran has been issuing clear warnings to regional countries through multiple channels. Citing five sources, media reports on August 5 indicated that Iran has warned Persian Gulf states that if the U.S. attacks Iranian territory again, Iran will strike key energy infrastructure throughout the Persian Gulf region, among other regional targets. The sources noted that following President Trump's threat on July 28 to attack Iran's energy grid and infrastructure, Iran conveyed this warning to Persian Gulf states through intensive high-level diplomatic contacts. Iranian Foreign Minister Abbas Araghchi relayed this warning during communications with officials from Saudi Arabia, Turkey, Qatar, and the Pakistani Army Chief of Staff, simultaneously urging Washington's regional allies to lobby President Trump to return to the diplomatic track. A Gulf region source stated, "Iran has sent a clear warning: if the U.S. targets Iranian infrastructure, Iran will retaliate by striking energy facilities and other regional targets in the Persian Gulf." This warning comes against the backdrop of the U.S. Central Command stating on August 5 that it continues its maritime blockade of Iran. As of that day, U.S. forces had forced 48 ships to change course in the Strait of Hormuz area, disabled two vessels, and boarded two others for inspection. Meanwhile, Yemen's Houthi group announced on August 5 a maritime blockade of Saudi ports and ships, firing a missile at a Saudi oil tanker near the Red Sea port city of Yanbu, and launching a missile attack on another Saudi oil tanker in the Gulf of Aden. This development further escalates the risk to Red Sea shipping, compounding the tensions in the Strait of Hormuz.
U.S. Stance and Negotiation Outlook: Optimism and Caution Coexist
U.S. President Donald Trump has expressed optimism about the negotiation prospects. On August 4, Trump told Fox News that the Strait of Hormuz would be reopened "very soon," or else Iran would face "severe blows." He claimed to have had "ongoing negotiations all day" and stated that "the consultations are going very well." However, regional sources and Iranian officials have questioned Trump's claims. An Iranian source said, "The devil is in the details. A single tweet from Trump could collapse the entire agreement." Iranian Deputy Foreign Minister Gharibabadi denied that Iran and the U.S. are currently negotiating, but stated that Iran has received messages from the U.S., indicating that Washington is prepared to resume fulfilling its commitments under the previously signed memorandum of understanding. Gharibabadi further stated that Iran has received a message from the U.S. side, claiming that the U.S. is "fully ready to fulfill" the commitments made in the memorandum of understanding reached in mid-June, which stipulated an immediate cessation of military operations. He emphasized, however, that this is one of the necessary conditions for restarting navigation through the Strait of Hormuz, but it alone is insufficient. From a strategic perspective, any arrangement that grants Iran control over shipping in the Strait of Hormuz would represent a major strategic advantage for Tehran. The Associated Press analysis suggests that any agreement formally establishing Iran's control over the strait would mark a significant strategic victory for Tehran. The U.S. had previously stated repeatedly that it would never accept Iranian control over the passage rights of this most critical global energy transport route. Influenced by Trump's decision to cancel a new round of attack plans against Iran, citing the potential for negotiations to end the conflict, international crude oil prices fell sharply in the past few trading sessions, hitting three-week lows, before oscillating in a low range on Wednesday. However, given the significant differences that remain between the parties on core issues such as the definition of control, toll rates, and the lifting of the U.S. blockade, the feasibility of a genuine and swift reopening of the Strait of Hormuz remains highly uncertain. The price of spot gold has surged, briefly touching the $4,300 level, a seven-week high, initially breaking out of the sideways trading range (3950-4200) that had persisted for over a month and a half since June 24. If the price can hold above the $4,200 level, gold could be poised for a medium-term uptrend. However, Federal Reserve Governor Cook stated that she is open to raising short-term interest rates to tackle inflation, so investors still need to closely monitor changes in expectations for Fed rate hikes. On the data front, the ADP report showed that U.S. private sector employment growth slowed to 44,000 jobs in July, down from a revised 95,000 in June. Markets are now awaiting Friday's non-farm payrolls report for further clues on policy direction. This trading session will also see the release of data on U.S. initial jobless claims for the week ending August 1 and the July Challenger job cuts report, which investors should closely monitor. At 09:55 Beijing time, spot gold was trading at $4,288.85 per ounce.
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