Oman and Iran discuss temporarily opening the strait as oil prices fall for a third consecutive day

(1) Influenced by news of Oman and Iran discussing the temporary reopening of the Strait of Hormuz, international oil prices have fallen for the third consecutive trading day. The Brent crude October contract dropped about 2.6% to $86.62 per barrel, and West Texas Intermediate fell about 2.7% to $80.12 per barrel, once dipping below the $80 mark during trading. Both contracts are on track to record the lowest settlement levels in nearly two weeks.(2) After talks in Tehran, the foreign ministers of Oman and Iran issued a joint statement saying that the two sides discussed an agreement to temporarily reopen the strait under a provisional framework. The proposed plan aims to establish temporary shipping routes in this key waterway, and the two countries will also cooperate to clear naval mines within the strait.(3) U.S. President Trump posted on Truth Social on Tuesday claiming that the U.S. Navy has cleared or detonated all naval mines in the strait, but some analysts remain skeptical about the authenticity of this statement.(4) Analysts from ING pointed out that although talks between Oman and Iran are a positive signal, they are not sufficient to restore oil supply through the strait to pre-war levels. The U.S. lifting the blockade on Iranian ports and easing sanctions may be prerequisite conditions for normalization.(5) Meanwhile, about 40 ships passed through the strait over the weekend. Combined with news of the U.S. planning to resume diplomatic operations at multiple embassies in the Middle East, this further boosted market expectations for progress in regional diplomacy.