Diplomatic efforts to address shipping safety in the Strait of Hormuz have hit a significant roadblock, prompting an immediate and sharp reaction across energy markets.
According to reports from Xinhua News Agency, Oman's Foreign Minister Badr announced on the 13th that a regional meeting scheduled for the 14th in the southern city of Salalah had been postponed, citing the need for all parties to continue building consensus. Iran's Foreign Ministry spokesperson, Baghaei, had earlier indicated that Tehran and Muscat planned to brief Gulf nations on the outcomes of their bilateral consultations regarding navigation in the strait during that gathering.
In parallel, U.S. Energy Secretary Chris Wright delivered a sobering message to traders while in Vienna. Speaking on Sunday, he stated that "it would be obviously unwise to expect that we can reach an agreement with Iran at present," explicitly cautioning oil market participants against anticipating any major breakthrough on the Hormuz issue in the near term.
The combination of the meeting's delay and the shutdown of a Saudi oil pipeline lifted both Brent and WTI crude futures by more than $3 per barrel during the trading session, while European natural gas futures also climbed by 3.8%.
Gulf Divisions Surface Over Saudi Amendments
A Gulf official posted on platform X that Saudi Arabia had submitted amendments to the proposal put forward by Oman and Iran concerning the Strait of Hormuz. Riyadh is reportedly concerned that the current wording could effectively establish a new status quo in the strait, one that neither the Kingdom nor other Gulf Cooperation Council members would find acceptable.
This divergence appears to be the underlying reason behind the meeting's postponement. Although Iran and Oman had completed intensive consultations, and rare high-level talks took place between officials from Tehran and Abu Dhabi, Gulf states have yet to align on the specific language of the agreement framework. Oman's Foreign Minister Badr emphasized that Muscat remains committed to fostering dialogue and supporting regional stability and lasting cooperation.
Washington Cautions Markets Against False Hope
Wright made his remarks during the annual International Atomic Energy Agency conference in Vienna. He noted that with the strait's passage constrained, the market must continue relying on alternative shipping routes, which he estimated currently have the capacity to move about 10 million barrels of crude oil and refined products per day.
He further observed that "the global oil market supply is tighter than we would like, but not excessively so." On the nuclear file, Wright struck a firm tone, asserting that Tehran's nuclear program "will come to an end one way or another."
Energy Markets Strengthen in Response
Following the news of the postponement, energy markets moved swiftly. Brent and WTI crude futures both advanced by more than $3 intraday, European gas prices rose by 3.8%, and the Saudi pipeline shutdown added extra pressure on sentiment.
Wright's comments reinforced expectations that normal transit through the Strait of Hormuz is unlikely to resume anytime soon. With alternative routes under strain and diplomatic prospects clouded, concerns over tight energy supply are expected to keep supporting oil prices in the near term.