Iran-Trump Hormuz diplomacy dispute deepens as shipping traffic plunges

Iran-Trump Hormuz diplomacy took a sharper turn after Mohammad Bagher Ghalibaf, Iran’s parliament speaker and lead negotiator, accused President Donald Trump of running “theater diplomacy.” The dispute matters to investors because shipping through the Strait of Hormuz, a critical route for energy supplies, has fallen far below its pre-war pace while the terms for restoring traffic remain unsettled.

In a Thursday post on X, Ghalibaf mocked the shift from threats of attack to claims of negotiations, calling it “theater diplomacy on loop.” His remarks followed Trump’s decision to call off planned strikes and his assertion that the broad outlines of an agreement with Tehran had been settled, according to CNBC.

Iranian officials rejected Trump’s account, saying no talks with the United States were under way. That disagreement is separate from bilateral discussions between Iran and Oman over how commercial vessels could move through the strait.

What is happening with Strait of Hormuz shipping?

Kpler vessel-tracking data cited by CNBC showed that two vessels transited the Strait of Hormuz on Wednesday, down from eight the preceding day. Before the war, the cited daily range was roughly 130 to 140 vessels. The figures show the waterway remains severely constrained even as officials discuss a possible traffic-management arrangement.

The Strait of Hormuz links the Gulf to open waters and carries commercial shipping, including energy cargoes. A reopening framework would set the conditions under which ships can pass, but an agreement on operating rules would not necessarily return traffic to its earlier level.

Reuters reported on Aug. 5 that an Iran-Oman proposal could give Tehran authority over vessels entering the Gulf, citing a senior Iranian source and two regional officials. Those sources also said major details had yet to be resolved, including what Iranian “control” would mean, how inspections would be supervised and whether any fees would be voluntary.

Iranian Deputy Foreign Minister Kazem Gharibabadi said through the state news agency IRNA that negotiators had reached “fundamental understandings” with Oman and envisioned commercial ships traveling through Iranian territorial waters in both directions, Reuters reported. He also said no U.S.-Iran negotiations had occurred in recent days.

A separate draft described by Iran’s semi-official Fars news agency would bar U.S. and Israeli ships from the strait, CNBC reported. Fars said the restrictions could also apply to countries deemed to have damaged Iran until compensation was paid, and that violators could face penalties worth as much as 20% of their cargo value. The plan was under review, according to the report.

Oil prices rose Friday as Tehran’s stance on Hormuz appeared to harden, CNBC said. October Brent futures gained 1.3% to $83.55 a barrel, while September West Texas Intermediate futures rose about 1.1% to $78.17. Those moves reflect a market responding to an unresolved shipping disruption, rather than confirmation that a broader diplomatic settlement has been reached.

This story draws on original reporting from CNBC.