This article first appeared on GuruFocus.
The S&P 500 edged higher Thursday after Iran and Oman reached an agreement in principle over commercial traffic through the Strait of Hormuz, giving investors fresh hope that a major threat to global oil supplies could ease. However, the market response remained restrained because the arrangement still requires political approval and faces serious questions from shipping companies, insurers and U.S. sanctions authorities. The S&P 500 was up about 0.1% in early trading.
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An understanding in principle has been reached on almost all the raised issues, including the map for maritime traffic entry and exit routes, said Kazem Gharibabadi, Iran's Deputy Foreign Minister.
Under the proposed arrangement, inbound commercial vessels would travel through Iranian waters, while outbound ships would use Omani waters with Tehran's approval. The temporary framework would reportedly last 60 days and could be extended, potentially creating room to revive the broader ceasefire and nuclear negotiations.
The deal does not amount to a complete reopening of the waterway, and Iran has emphasized that the U.S. is not formally involved. Final approval is also uncertain. Iranian President Masoud Pezeshkian said communication with Supreme Leader Mojtaba Khamenei is very difficult.
The stakes are enormous. Roughly 25% of global seaborne oil trade passed through Hormuz in 2025, while alternative pipeline capacity remains limited. Optimism surrounding the talks helped keep Brent crude near $80, reducing fears that another energy-price surge could worsen inflation.
Still, shipping-industry representatives have warned that the proposal may be difficult to implement because sanctions and insurance restrictions could prevent vessels from complying with Iranian requirements.