As American and Iranian negotiators prepared to meet in Doha on Tuesday, Iran made clear it has no plans to loosen its grip on the Strait of Hormuz, the narrow waterway that carries a fifth of the world’s oil. Iranian Foreign Minister Abbas Araghchi said Tehran now holds sole control of the strait and warned against any move to establish new or separate arrangements for the channel. A day earlier, senior adviser Ali Akbar Velayati urged that Iran’s demand to charge passing ships be honored and suggested neighboring Oman support the proposal.

That stance sets up the central issue in the talks. The waterway runs between Iran and Oman, and at its narrowest point passes through both countries’ territorial waters. Under the memorandum of understanding that President Donald Trump and Iranian President Masoud Pezeshkian signed on June 17, Iran agreed to reopen Hormuz immediately and spend 60 days negotiating a broader peace agreement. The same document bars Iran from charging tolls during that period, but Tehran has left open the possibility of imposing fees afterward—an idea the United States, Europe and the Gulf Arab states oppose.

Why it matters to everyday buyers

Hormuz is not just a military flashpoint. About 20% to 25% of the world’s seaborne oil and roughly 20% of its liquefied natural gas normally pass through the strait. Before the war began on February 28, roughly 3,000 ships crossed Hormuz each month. After Iran closed the passage and laid sea mines, traffic collapsed. World Trade Organization figures show crude tanker movements fell 95%, while liquefied natural gas carriers dropped 99%.

When that much energy stops moving, prices surge. Brent crude climbed above $126 a barrel in March, California gasoline topped $5 a gallon, and fertilizer shipments—up to 30% of the world’s traded supply also move through Hormuz—were disrupted, raising costs for farmers and consumers around the globe.

Now the trend has reversed. With the ceasefire largely holding and commercial shipping gradually resuming, oil prices have fallen sharply. On Tuesday, U.S. West Texas Intermediate crude traded near $70 a barrel, while Brent crude hovered around $73, both back near their pre-war levels. WTI has fallen roughly 30% during the quarter, marking its steepest three-month decline since 2020. Lower crude prices are beginning to filter through to gasoline stations, providing some relief for household budgets.

The sticking points

The proposed toll system remains the biggest dispute, but it is far from the only one. Secretary of State Marco Rubio has said any Iranian effort to charge transit fees would make a diplomatic agreement unworkable, maintaining that the Strait of Hormuz is an international waterway open to all vessels. Iran argues it has the right to regulate shipping through its coastal waters.

Another unresolved issue is clearing the estimated 80 sea mines still scattered throughout the channel. The June agreement assigns that responsibility to Iran within 30 days, but France and Oman said this week they are prepared to assist with demining following a visit to Paris by Oman’s ruler, Sultan Haitham bin Tarik. Tehran has objected, insisting the cleanup should remain under Iranian control.

Even if negotiators reach a broader agreement, shipping companies expect recovery to take time. Hundreds of tankers remain stranded inside the Persian Gulf, and the Abu Dhabi National Oil Company has warned that full shipping volumes may not return until 2027. War-risk insurance also remains elevated. Premiums that once averaged about 0.125% of a vessel’s value per voyage climbed as high as 0.4% during the conflict, adding roughly $250,000 to the cost of operating a single supertanker.

A fragile next step

The Doha meeting itself remains uncertain. President Donald Trump said on social media that Iran had requested the talks, but Iran’s Foreign Ministry denied Monday that negotiations with U.S. officials had been confirmed. Lead Iranian negotiator Kazem Gharibabadi also said reports of a scheduled meeting were premature. The two sides have met in person only once before, on June 21 in Switzerland.

For now, markets are responding more to the movement of ships than to diplomatic statements. As long as tankers continue crossing the strait and the ceasefire holds, energy prices are likely to remain relatively stable. But the dispute over who controls the Strait of Hormuz—and whether ships will eventually face transit fees—remains unresolved. Any breakdown in negotiations could quickly send oil prices, shipping costs and, ultimately, consumer prices higher once again.

JBizNews Desk | New York
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