- Written by: The Times
After months of disruption to one of the world's most important energy corridors, Iran and Oman are discussing a temporary shipping route through the Strait of Hormuz while the United States says the international shipping lanes have been cleared of mines. It is the most encouraging development for global energy trade in some time — but reopening a waterway requires much more than removing explosives from the sea.
For months, almost every significant development surrounding the Strait of Hormuz has made the situation worse.
Oil and LNG movements have been disrupted.
Iran has imposed increasingly elaborate requirements governing passage.
The United States has imposed sanctions.
Emergency oil reserves have been released.
Now, finally, there is a development pointing in the other direction.
Iran and Oman are discussing a phased framework designed to restore safer navigation through the Strait of Hormuz.
The proposal includes a joint temporary navigation corridor, cooperation on mine clearance and continuing technical negotiations towards a permanent shipping arrangement.
At almost exactly the same time, the United States says mines have been cleared from the international shipping lanes through Hormuz.
Neither development means Hormuz is back to normal.
But together they raise an important question.
Are we finally seeing the beginning of its reopening?
Iran and Oman are talking about the ships
Oman and Iran sit on opposite sides of the Strait.
Their foreign ministers have now discussed what they describe as a phased and practical framework for restoring maritime traffic.
The proposed temporary corridor would be followed by negotiations over a permanent navigational corridor and future arrangements for administering passage.
The discussions also contemplate mechanisms for exchanging information, managing vessel traffic and providing navigation and security services.
That takes the conversation beyond political declarations about whether Hormuz is open or closed.
It moves towards the practical question:
How do we get commercial ships moving through it safely again?
Oman matters enormously
Oman's role should not be underestimated.
The Sultanate occupies a strategically important position on the southern side of Hormuz and has traditionally maintained relationships allowing it to communicate with parties that often struggle to communicate directly with each other.
It also has a direct national interest in restoring safe navigation.
This is not an abstract diplomatic exercise for Oman.
Shipping disruption affects its economy, ports, security and relationships with neighbouring Gulf states.
An arrangement involving Iran and Oman therefore has considerably more practical significance than another distant diplomatic declaration.
The United States says the mines are gone
Then came another potentially important development.
US President Donald Trump announced that the US Navy had removed or destroyed mines from the international waters of the Strait of Hormuz.
A US official subsequently confirmed that both inbound and outbound shipping lanes had been cleared.
That is potentially a major operational achievement.
Naval mines are particularly effective weapons because they create danger disproportionate to their cost.
A mine does not need to sink a tanker to disrupt shipping.
The possibility that one exists can be enough.
A commercial operator considering sending a valuable tanker through a mined waterway must consider the ship, cargo, crew, environmental consequences and enormous potential financial loss.
Remove the mines and one major source of uncertainty disappears.
There is an important disagreement
The story becomes more complicated here.
Iran and Oman are discussing a joint mine-clearing project at the same time the United States says the relevant international waters have already been cleared.
Those positions do not fit perfectly together.
That may reflect differences over which areas have been cleared, what each government recognises as the relevant navigational corridor, or how future mine clearance should be managed.
It is therefore too early to declare the mine problem definitively resolved throughout the Strait.
The important development is that mine clearance has moved from being merely a military problem towards becoming part of the diplomatic framework for restoring navigation.
Removing mines does not remove missiles
An oil tanker was struck and disabled near Oman this week.
The incident demonstrated that even as diplomats discuss navigation arrangements, commercial vessels continue to face genuine physical danger.
That matters enormously to shipowners and insurers.
A mine-free shipping lane through an area where vessels can still be struck by missiles or drones remains a high-risk commercial proposition.
Three things must happen before Hormuz is really open
It is useful to think about reopening Hormuz as three separate problems.
Ships must be able to navigate the waterway without unacceptable risk from mines, missiles, drones or other attacks.
Mine clearance addresses part of this problem.
Governments need an agreed understanding of how vessels can pass, what rules apply and who administers the system.
The Iran-Oman negotiations begin addressing this problem.
Shipowners, charterers, banks, insurers, cargo owners and crews must believe that using the Strait makes commercial sense.
This third test may prove the most difficult.
Iran's rules have not disappeared
Iran has spent recent months constructing its own system for regulating Hormuz traffic.
It has required information from vessels.
It has threatened fines, detention and confiscation.
It has blacklisted vessels it says have failed to comply.
Those measures do not automatically disappear because mines have been removed.
Nor does the larger disagreement about Iran's authority over international navigation disappear.
This is where negotiations over a temporary corridor become particularly important.
A recognised temporary arrangement could provide commercial operators with something they desperately need:
What happens if Iran considers a vessel non-compliant?
Until commercial operators receive satisfactory answers, traffic may remain depressed.
Insurance may provide the real verdict
We have previously examined the increasingly important role of war-risk insurance in this crisis.
That remains one of the best indicators of whether conditions are genuinely improving.
An insurer does not need to make a geopolitical statement.
If insurers believe Hormuz has become materially safer, premiums should eventually fall.
Shipowners should find voyages easier to finance.
Charterers should become more willing to send vessels through.
If insurance premiums remain at extraordinary levels despite mine clearance and diplomatic discussions, the market is effectively saying:
We don't believe the danger has gone away.
That is why insurance may tell us more about the real reopening than political speeches.
Then watch the tankers
For months, vessel movements have provided one of the clearest indicators of the crisis.
On some recent days, tracked commodity-vessel movements fell into the low single digits.
Commercial tracking is imperfect because some ships deliberately switch off or manipulate their AIS signals.
Military authorities may see vessels commercial tracking services cannot.
But the broad collapse in normal transparent commercial traffic has been unmistakable.
If Hormuz is genuinely becoming safer, we should eventually see the evidence on the water.
The VLCCs matter
Very large crude carriers — VLCCs — are particularly important.
These enormous vessels are fundamental to international crude-oil transportation.
If major operators become comfortable sending VLCCs through Hormuz again, that would be a significant vote of commercial confidence.
These highly specialised vessels transport liquefied natural gas from major Gulf producers, particularly Qatar.
Their return would provide another powerful indication that the energy trade believes risk is becoming manageable.
LNG urgently needs a solution
The LNG market provides one of the strongest reasons governments have to make the emerging arrangement work.
European LNG prices have risen above US$22 per million British thermal units, their highest since January 2023.
Asian LNG prices have moved to around US$24.
The disruption of normal Gulf LNG movements is an important contributor.
Qatar is one of the world's dominant LNG suppliers.
Its geography makes Hormuz enormously important to getting those cargoes to customers.
Europe and Asia therefore have a powerful economic interest in seeing normal LNG shipping restored.
Australia has an interest too
Australia is itself a major LNG exporter.
At first glance, expensive international LNG might appear beneficial.
Australian producers can potentially receive higher prices.
Australian LNG also becomes strategically more important to Asian customers seeking supply outside the Persian Gulf.
Australia participates in the same interconnected regional energy economy.
Disrupted Gulf LNG changes Asian competition for energy.
And prolonged global energy instability can eventually damage economic growth among Australia's major trading partners.
Australia benefits from competitive energy exports.
It also benefits from a functioning international energy system.
Oil tells another interesting story
Crude-oil prices have recently fallen despite the continuing geopolitical confrontation.
It suggests traders currently believe enough crude remains available through emergency stocks, alternative routes, discounted Gulf barrels and production elsewhere to prevent an immediate extreme shortage.
But we have already learned an important lesson from this crisis.
The crude price is not the whole fuel price.
Australia can still experience expensive petrol and diesel even while Brent falls.
Because refined-product availability matters.
The cost of physically delivering usable fuel matters.
A genuine Hormuz reopening could begin easing several of those pressures simultaneously.
Australia's diesel bill is therefore worth watching
If substantial tanker traffic returns through Hormuz, Asian refineries should eventually find it easier to obtain suitable Middle Eastern crude.
That could improve diesel and jet-fuel production.
Greater availability could reduce extreme refining margins.
More tankers returning to normal routes could reduce freight pressure.
Lower perceived risk could reduce insurance premiums.
Those changes would not appear at Australian service stations the following morning.
Energy supply chains take time to adjust.
But genuine normalisation could eventually feed through to Australia's landed fuel costs.
It would matter even more broadly to freight, agriculture, mining, aviation and construction.
There is a danger in declaring victory too early
Politicians understandably want to announce progress.
But Hormuz has demonstrated repeatedly that apparent improvements can be reversed.
A temporary corridor is not a permanent settlement.
Mine clearance is not protection from missiles.
An agreement is not necessarily compliance.
And a technically open waterway is not commercially normal until businesses are prepared to use it.
That is why the next stage should be judged by evidence rather than optimism.
What should we watch now?
Watch Iran's treatment of vessels it has blacklisted.
Watch whether the proposed temporary corridor actually begins operating.
Watch whether attacks on commercial vessels cease.
If several of those indicators begin improving together, we can reasonably say Hormuz is reopening.
Until then, we should describe what is happening more carefully.
The conditions for reopening are beginning to emerge.
The Times View
For months, the Hormuz story has been a story of deterioration.
Now there is finally something different.
Iran and Oman are talking about a practical navigation corridor.
The United States says the international shipping lanes have been cleared.
But ships do not move because politicians announce that a waterway is safe.
Commercial ships move when owners, insurers, financiers, cargo customers and crews collectively conclude that the risks have become acceptable.
That is the standard by which the latest developments should be judged.
The world should welcome progress without confusing it with resolution.
For Australia, a genuine reopening would eventually help relieve pressure on refined-fuel supply, shipping, insurance and regional energy markets.
But perhaps, for the first time in some time, we can see a plausible route from here to there.
The next test requires no diplomatic expertise.