Iran and Oman Establish New Hormuz Routes Amid Strained Global Trade

The Iran-Oman agreement on new Hormuz routes has significant implications for oil, ships, and global trade. The proposed arrangement establishes new routes for vessels entering and leaving the Persian Gulf, with part of the inbound route running through Iranian territorial waters and part of the outbound route passing through Iranian waters.

The temporary corridor is expected to be about 7 miles wide, according to Iranian officials. This agreement comes as traffic through the strait remains dramatically below normal levels, with only an average of 10 commodity ships a day crossing Hormuz in early September.

Oil prices have sharply increased due to the disruption, with Brent crude on course for a weekly gain of over 8% as of September 11. Goldman Sachs has warned that oil could climb as high as $120 a barrel if attacks on Middle Eastern shipping intensify.