PiCK
Iran, Gulf States Postpone Hormuz Temporary Shipping-Lane Talks at Saudi Request; Brent Tops $108
Summary
- Iran said talks on the temporary operation of shipping lanes in the Strait of Hormuz with Gulf Arab states were postponed at Saudi Arabia’s request.
- As negotiations falter, Iran is pursuing a temporary transit plan that would include deciding which vessels may pass and imposing transit fees, while GCC members are demanding free passage for ships.
- The disruption in talks and the prolonged war in the Middle East have kept concerns over oil supply alive, pushing Brent crude prices above $108 a barrel.
Forecast Trend Report by Period
Talks Iran and Gulf Arab states had been preparing on temporary shipping lanes through the Strait of Hormuz have been postponed at Saudi Arabia’s request.
Bloomberg reported on September 14 that Iran’s Foreign Ministry said the meeting between Iran and Gulf states, which had been scheduled to take place that day in Oman, had been postponed for the time being at Saudi Arabia’s request.
The Saudi request was reportedly driven in part by frustration over continued attacks on the kingdom by Iran-aligned forces, including Yemen’s Houthi rebels. Iran’s Foreign Ministry pushed back, saying Saudi Arabia’s request to delay regional talks over the situation in Yemen was diverting attention from the root cause of the current crisis.
Oman has spent the past several weeks discussing shipping arrangements in the Strait of Hormuz with Iran. Omani Foreign Minister Badr al-Busaidi said the delay was intended to help secure an agreement.
Had the meeting gone ahead, it would have marked the first gathering of Iran, members of the Gulf Cooperation Council and Iraq since the United States and Israel went to war with Iran in February. But the talks ran into trouble as fighting intensified between Saudi-backed forces and Yemen’s Houthi rebels.
Houthi attacks have repeatedly hit energy infrastructure in southwestern Saudi Arabia this month. Last week, Saudi Arabia’s key East-West pipeline was shut after a series of drone attacks launched from Iraq. The Houthis also claimed on September 14 that they had attacked an air base in Khamis Mushait in southwestern Saudi Arabia.
The talks were originally set to cover a temporary transit framework for the Strait of Hormuz drawn up by Oman and Iran. The proposal included a plan that would allow Iran to decide which ships could enter the Persian Gulf and to impose a form of transit fee.
GCC members have in principle demanded freedom of navigation for vessels. Still, there has been discussion that they may accept an interim deal that falls short of full freedom of passage in order to expand maritime transport. Iran has indicated that even if a deal is reached, it would not fully reopen the Strait of Hormuz and would continue screening vessels seeking to pass through.
The disruption in negotiations has also kept concerns over oil supply alive. Brent recently climbed above $108 a barrel as the prolonged war in the Middle East raised fears of further disruptions to supplies of diesel and other petroleum products.
Military tensions around the Strait of Hormuz have also persisted. The United Kingdom Maritime Trade Operations said a ship hit by a projectile the previous day caught fire. Iran’s state-run IRIB reported that a commercial vessel was attacked near Qeshm Island and Hengam Island, leaving one person dead.
