Despite the US-Iran ceasefire agreement, fighting continues in the Persian Gulf as both sides try to gain control of the Strait of Hormuz.
Iran insists that all traffic must be authorized and has attacked ships attempting to cross the narrow waterway outside its approved route along Iran’s coast. It’s on Saturday declared the strait closed again and claimed to have hit a ship on an “unauthorized route.”
The US responded by bombing Iranian sites used for drone and missile attacks and did so again on Saturday. At the same time, they defended ships that followed an alternative route along the Omani coast.
“Iran was offered another opportunity to demonstrate its compliance with the Memorandum of Understanding after being held responsible for previous attacks on merchant vessels, but it has failed again.” This is what the US Central Command said on X. “In response, the United States is incurring heavy costs by continuing to prevent Iran from attacking civilian sailors and merchant vessels passing freely through the Strait.”
Senior U.S. officials have demanded a public statement from Tehran that the strait is open and no ships will be attacked. But the ability to seal it off – and threaten the global economy with an oil shock – represents Iran’s main source of leverage.
Weeks of U.S. bombing during the war failed to fully reopen the strait, although the Navy established an alternative channel by guiding ships through and offering them protection from Iranian attacks.
The result has been a stalemate in recent weeks as the US refused to back down from its attempt to restore free navigation while Iran refused to relent in asserting its authority.
The solution could be reminiscent of the famous Old Testament story in which Solomon orders a baby claimed by two women to be cut in half.
Oman has drawn up a proposal to control traffic in the strait through two separately controlled routes: Sources told CNN on Saturday.
The plan has yet to be finalized but envisages freedom of navigation under pre-war conditions in the southern corridor through Omani territorial waters.
The northern corridor through Iranian waters requires prior approval from Tehran, but no tolls would be charged, the report said.
The Omani foreign ministry did not immediately respond to a request for comment.
Iran’s foreign minister met with his Omani counterpart in Muscat on Saturday to discuss ways to ensure safe passage through the strait.
Oman said so and Iran agreed to continue discussing the Strait of Hormuz “at a technical and political level.”
Of course, no corridor can be truly open until shipping companies and their insurers deem it safe enough for transit, regardless of official declarations from the US or Iran.
Defending the Omani route from Iran was the responsibility of the US military, giving it effective control over it, although some attacks still got through.
But even if the US manages to intercept all of Iran’s drones and missiles, enough ships will still need to come and go to load and deliver the Persian Gulf’s oil supplies. Until then, oil markets will remain under pressure and will force consuming countries to further reduce their reserves.
The current status quo under the fragile ceasefire may be untenable. The United States and Iran have signaled reluctance to return to all-out war, but further skirmishes are possible.
Dan Alamariu, chief geopolitical strategist at Alpine Macro, said in a note Wednesday that the U.S. could try to break open the strait with military force, adding that current military operations suggest the U.S. may be positioning itself for that option.
Another approach is to “economically wear down” Iran. Reintroduction of a naval blockadewhich he called the “path of least resistance” unless the memorandum of understanding signed last month is reaffirmed.
Alamariu predicted a new deal may be necessary. But further fighting, a blockade, or both are possible along the way.
“Ultimately, both sides need an early agreement given the domestic vulnerabilities: looming midterm elections in the US and Iran’s economic and political weaknesses,” he said. “A new agreement is therefore entirely possible, probably even within a month or two (or sooner), although the timing and escalation paths are still very uncertain. The current attacks and counterstrikes are an opportunity for negotiation as both the US and Iran seek to build greater influence.”