(Bloomberg) — Gulf states are weighing a meeting with Iranian officials next week to discuss the future of the Strait of Hormuz, people familiar with the matter said, as disruptions to the critical oil shipping route continue to pressure regional energy flows.
Oman is seeking to bring together foreign ministers from the six-member Gulf Cooperation Council and Iran on Monday in Salalah, according to the people, who asked not to be identified discussing sensitive matters.
The meeting has not been confirmed, and escalating hostilities between Saudi-backed forces and the Iran-supported Houthis in Yemen could complicate the plans. It is also unclear whether all GCC members, which include Saudi Arabia, the United Arab Emirates, Qatar and Oman, would attend.
Tehran has insisted on retaining control over Hormuz and has been discussing a framework for managing maritime traffic with Oman for several weeks. Such an arrangement would likely involve fees for vessels transiting the strait, a proposal opposed by the U.S. and Gulf states.
The talks come as the Houthis push toward Red Sea coastal areas bordering the Bab el-Mandeb Strait, raising concerns over another key global shipping route. The risk has become particularly significant for oil markets since restrictions at Hormuz prompted Saudi Arabia to redirect crude through pipelines to export terminals in the west.
Houthi forces have also continued missile and drone attacks on Saudi Arabia, damaging energy sites and increasing the risk of further disruptions.
Oil prices have surged this week as prospects for a near-term end to the U.S.-Iran conflict have diminished. Brent crude is on track for its biggest weekly gain since July, despite falling more than 3% on Friday to about $104/bbl after the International Energy Agency warned of a deteriorating demand outlook.
The Strait of Hormuz, one of the world’s most important conduits for oil and natural gas, has been effectively closed to normal shipping since the U.S. and Israel began strikes on Iran in late February. Washington has sought to restore free passage through the waterway, while Tehran has resisted relinquishing control.
Some vessels have resumed moving through Hormuz over the past two months, largely at night and with U.S. military protection, according to Bloomberg. Saudi Arabia and the UAE have also used pipelines to bypass the strait for a portion of their crude exports.
A disruption at Bab el-Mandeb in addition to the continuing restrictions at Hormuz could further constrain Middle East oil exports and increase pressure on alternative export routes.
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