Iran and Oman have almost closed a deal to split control of the Strait of Hormuz into two: a northern part controlled by Iran and a southern part supervised by Muscat.

The two have reached a preliminary agreement on the geographic coordinates for shipping lanes through the Strait, and a joint announcement is being finalised provided certain third parties do not interfere, Iran's foreign ministry spokesperson Esmaeil Baghaei said on August 5.

France 24 reported that Iranian and Omani negotiators have finalised a draft deal and are awaiting final approval from Iran's Supreme Leader Ayatollah Mojtaba Khamenei, citing two regional officials briefed on the talks.

The agreement is the clearest signal yet that five months of war over the world's single most important oil chokepoint is edging toward a negotiated pause.

The deal on the table is not the one Washington set out to enforce when it started this war. US President Donald Trump had a long list of demands at the start of Operation Epic Fury on February 28, but those have now been whittled down to one: reopen the straits and lets go back to normal. He is unlikely to even get that.

The proposal on the table would give Tehran control over ships entering the Gulf through the strait - one of the biggest concessions yet to Iran, a senior Iranian source and two regional officials told Reuters - even as Trump insists a deal reopening the strait is imminent.

Vessels would enter through Iranian waters and leave mostly through Omani ones, with Iran first sending its own ships, including oil tankers, through the route to clear it of mines before other shipping resumes. A fight over exactly this kind of arrangement - and over who gets to charge ships for using it - is now playing out on four separate fronts at once: the diplomacy itself, the question of who is actually in charge in Tehran, a widening war along the Red Sea, and an open revolt by the global shipping industry against the idea of paying tolls to sail through at all.

Strategic humiliation for Trump

Donald Trump and his aides have said more than a dozen times over the past five months that the US is “close” to a deal with Iran, the Financial Times reported. But if one materialises from the Iran-Oman talks, it falls well short of the objectives Trump laid out when he launched the war in February. His demands have shrunk from a sprawling list covering Iran's nuclear programme, ballistic missiles and proxy militias to a single one: that Iran allow the strait to return to its prewar state.

“The denuclearisation of Iran is the ultimate deal,” US Secretary of State Marco Rubio told reporters on August 4. “The immediate deal, and the one that you've seen a lot of focus on, is the strait.”

Even that narrower deal would mark something close to strategic humiliation, in the words of critics: Iran exploited its leverage over the strait only after Trump attacked it, and any settlement now on the table could hand Tehran a degree of control over the waterway - and the ability to eventually charge fees on vessels using it - that would have seemed unthinkable to US strategists a year ago.

“What was once free and unfettered is no longer,” said Aaron David Miller, a former Middle East peace negotiator for both Republican and Democratic administrations. “And there is almost nothing that Trump can extract from an agreement that the Iranians are willing to accept that changes that reality... I do not see right now a way to create a balance of interests where the Trump administration walks away with something that normal humans would regard as a win.”

The war has already cost Trump politically at home. US petrol prices above $4 a gallon are about 35% higher than before the war, and diesel prices under Trump have exceeded the average struck during the Biden years, while missile-interceptor stockpiles have dwindled and allies are exhausted.

A deal granting Iran some measure of control of the Strait of Hormuz will aggravate everybody from Gulf allies to American taxpayers. Trump's challenge has become not just how to fight this new type of asymmetrical war – something that has eluded him - but now how to explain this deal he is cutting to end it.

Iran expert Vali Nasr of Johns Hopkins University put it more bluntly: “Trump is stuck. He cannot win militarily at this level... He cannot resolve this diplomatically without paying a political cost at home. And periodically, he's lashing out because this is not as simple and as straightforward as he had calculated.”

Ali Vaez, an Iran expert at the International Crisis Group, said the mechanics of the talks reflect that shift in leverage: “It's not really a deal between Iran and the US. This is a deal between Iran and Oman.”

A White House spokesperson, Anna Kelly, pushed back, insisting the strait remains “completely controlled” by the US Navy and that Iran's degraded state made a deal the wise course - “otherwise, they know what will happen,” she said.

US Vice President JD Vance, asked about the state of the talks in an interview with Fox News' Laura Ingraham broadcast on August 5, described Iran as having a “fractured system” rather than a single decision-maker to negotiate with.

“The Iranians are extraordinarily difficult people, and number two, they have a fractured system within their system,” Vance said. “Some want the war to be over, and some who are crazy radicals want the war to continue... I know where we ultimately will land. It is going to be messy and it is going to take some time to get there.”

The wounded Supreme leader in the dark

That “fractured system” has a specific, unresolved problem at the very top: the man whose approval the deal is said to be waiting on has not been seen in public for months.

Ayatollah Mojtaba Khamenei succeeded his father, Ayatollah Ali Khamenei, as supreme leader after the elder Khamenei was killed in the US-Israeli strike that opened the war on February 28 - but Mojtaba himself is believed to have been seriously wounded in that same strike and has not appeared publicly since, as IntelliNews reported in April, when his formal confirmation as supreme leader was itself still being pieced together from official signals rather than a public appearance.

That uncertainty has not gone away in the four months since. Two regional officials briefed on the current Iran-Oman negotiations told the Associated Press, that the draft deal on the strait is still awaiting Khamenei's personal sign-off before it can be finalised - no one outside Iran's own leadership appears to have confirmed his condition or whereabouts since February. It leaves the deal's central approval step resting on a figure whose capacity to actually give it remains, by the negotiators' own account, an open question.

Iran's own diplomatic push on the strait has been running for weeks: chief negotiator Mohammad Bagher Ghalibaf, also speaker of parliament, travelled to Muscat in June to discuss Iranian arrangements for administering the strait directly with Oman's ruler, Sultan Haitham bin Tariq.

The war widens from Gulf to the Red Sea

Even as the Hormuz talks purportedly near a conclusion, the conflict's other maritime front is heating up rather than cooling down. A second chokepoint was closed after Houthi rebels in Yemen claimed on August 5 that they had fired ballistic missiles at a Saudi oil tanker in the Red Sea off the port of Yanbu, without providing evidence, France 24 reported; there was no immediate comment from Saudi Arabia.

A separate vessel in the Gulf of Aden reported a loud explosion nearby, with the British military's UK Maritime Trade Operations centre confirming the crew was safe. Shipping traffic through both Hormuz and the Bab-el-Mandeb strait - the two chokepoints most exposed to a widening Gulf-to-Red-Sea conflict - fell significantly on August 5 from the previous day, according to shipping data cited by Reuters.

The Houthi threat to Saudi shipping is not new but is escalating: the group announced in July that it was closing the Bab el-Mandeb Strait to Saudi-linked shipping, adding pressure on a route that has become a key alternative for Saudi oil exports since the Hormuz blockade began. A renewed flare-up between the Houthis and Saudi Arabia now threatens to reignite Yemen's civil war, which pitted the group against a Saudi-led coalition before the current war began.

The regional picture is fraying on a third front too. Israel's military carried out strikes in southern Lebanon on August 5 after accusing Hezbollah of violating a US-brokered truce that has largely held since June 20, issuing an evacuation warning to the village of Mansouri - the first such warning in weeks - though it gave no details of the alleged violation.

The strikes came as Lebanese and Israeli negotiators were meeting in Rome for a second day of talks on an Israeli withdrawal from southern Lebanon in exchange for Hezbollah's disarmament; a US State Department official said the talks ended early “due to events on the ground” but described the discussions as “extremely productive” and said they could resume on August 6.

No one wants to pay the toll

Peace talks are one thing, but for most the bigger question is if tankers will have to pay a hefty fee to pass through the straits after the war ends.

Eight of the world's largest shipping industry associations - including the International Chamber of Shipping, BIMCO and the World Shipping Council - wrote a joint letter dated August 3 to UN Secretary-General Antonio Guterres and International Maritime Organization Secretary-General Arsenio Dominguez urging them to oppose any compulsory tolls or transit charges in the strait, Bloomberg reported. The associations warned that a Hormuz toll would undermine the international legal framework governing navigation through international straits and set a precedent that could be copied at other chokepoints.

“Once such a precedent is established, it becomes increasingly difficult to resist similar measures elsewhere, creating uncertainty for international shipping and global commerce,” the group wrote.

Tehran has moved to tighten its grip on strait traffic since the war began, warning ships they need its permission to transit and threatening permanent transit fees or mandatory insurance requirements; it has at times sought ad-hoc payments of as much as $2mn per voyage, according to Bloomberg.

Washington has resisted Iran's attempts to assert control, backing a southern route along the Omani coast and deploying forces to help protect commercial vessels - though Trump himself briefly floated the idea of imposing his own 20% charge on cargo shipments crossing with US assistance in July, before dropping the plan after Gulf allies objected - a proposal Brazilian President Luiz Inacio Lula da Silva branded as “piracy” at the time.

Oman, the mediator whose waters would carry much of the outbound traffic under any deal, has told the IMO it opposes mandatory transit charges but is open to a voluntary arrangement modelled on the Strait of Malacca, where non-profit organisations are encouraged to make voluntary contributions toward navigational safety and environmental protection rather than paying a fixed toll. The US, Iran and Oman are said to be nearing a 60-day agreement on shipping through Hormuz involving no tolls or fees at all, though it remains unclear what happens once that window closes.

That unresolved question - a temporary, toll-free arrangement now, with Iran's insistence on eventually charging “service fees” for passage left for a second phase of talks it has not yet agreed to enter - is the clearest sign of how provisional any Hormuz deal in its current form actually is.

Iranian deputy foreign minister Kazem Gharibabadi has said reopening the strait carries “requirements of its own” and that Tehran will not accept “foreign interference” in the waterway, even as it holds out the prospect of a temporary window during which ships would sail free of charge.

Diplomats are hoping the arrangement can revive a June 17 memorandum of understanding between Washington and Tehran that collapsed after Iran attacked ships transiting the strait's Omani-side route - the same dispute over which routes ships should use that triggered the tit-for-tat strikes this deal is now trying to defuse.