Iran's Hormuz Deal Would Ban US Ships Entirely. Trump Still Calls It "Close."
Third UKMTO blast in four days, the Houthis reopen a Yemen front, and The Economist says Iran's already won this round.
What you need to know
Iran says it has reached an “in-principle” deal with Oman on Hormuz — but Reuters reports the version on the table would hand Tehran control of inbound Gulf traffic, a concession Washington had previously ruled out.
A tanker heard two explosions off Kumzar, Oman overnight — the third UKMTO incident in four days. Traffic through Hormuz has collapsed to two vessels, down from 130-140 before the war.
The Houthis hit a second Saudi tanker, Daisy, in the Gulf of Aden — nine Saudi ships targeted since 22 July. Bloomberg reports ADNOC has quietly moved more oil through Hormuz than any other producer, with transponders switched off.
UAE non-oil PMI rebounded to a four-month high of 52.7 in July; Wynn Al Marjan Island’s opening slipped to September 2027 with a $600m cost overrun.
Iran says it’s reached a deal with Oman. Reuters says the deal, as drafted, gives Iran control of who enters the Gulf — the exact red line Washington swore it would never cross. Somewhere in the White House press room this morning, someone is trying to write a victory lap around a concession.
Morning. Steve Moore here.
The Deal That Gives Iran the Front Door — and Bars the US From It
Iran’s Deputy Foreign Minister Kazem Gharibabadi told state media Wednesday that Tehran and Muscat have reached “fundamental understandings” on almost every major issue, including the entry-and-exit route map through Hormuz — a single new corridor replacing the earlier northern-and-southern-lane proposal, valid two to four months, with ships passing through Iranian territorial waters in both directions. Bloomberg’s later reporting, citing Iran’s semi-official Fars agency, sharpens exactly how one-sided that corridor is: the draft text, now under review in Iran’s parliament, would let Iran manage vessel entry into Hormuz outright, with exit jointly overseen by Iran and Oman, and traffic funnelled through a single “central corridor” while the two other routes currently in limited use get phased out. Fars also reported a proposed ban on cargo linked to Israel, and a fee structure covering insurance and environmental costs — on top of Iran wanting to bar US and Israeli ships from the strait entirely, and demanding compensation from any “hostile” country before its ships are allowed through. “That’s clearly not going to go down well in Washington,” Atlantic Council fellow Thomas Warrick told Bloomberg. “Instead of both sides making concessions, both sides are increasing demands.”
A US official said Thursday that any temporary route through Hormuz should carry no approvals, permissions, tolls or charges at all — which is, at this point, a position with roughly no overlap with what Iran is actually drafting. Gharibabadi added the caveat that’s becoming this war’s most reliable punctuation mark: an Iran-Oman deal “does not mean the full reopening of the Strait of Hormuz.” Full reopening still depends on the US lifting its blockade of Iranian ports, and Washington hasn’t said whether it would even return to the terms of June’s short-lived agreement, which included waiving oil sanctions and unfreezing Iranian assets — the deal that collapsed within weeks. Any final text also needs sign-off from Iran’s Supreme Leader Mojtaba Khamenei, who has reportedly been in hiding since being injured in February’s initial strikes; President Masoud Pezeshkian said Wednesday that communicating with him is “very difficult at the moment.” Trump, in Las Vegas Wednesday night, called the deal “close” anyway. Vice President Vance was rather less enthusiastic, telling reporters “people are attempting to jump to conclusions about the outcome” — the sound of an administration trying to lower expectations it spent all week raising. Brent, for what it’s worth, climbed above $82 a barrel Thursday on the reports, before easing back — the market apparently no more certain than anyone else whether this counts as good news.
Hormuz Still Isn’t Safe Enough to Use
While the paperwork gets negotiated, the strait itself remains close to empty. UKMTO reported early Thursday that a tanker heard two explosions nine nautical miles southeast of Kumzar, Oman — no damage, crew safe, but the third such incident in four days. Just two vessels transited Hormuz on Wednesday, a Panama-flagged coal carrier and a Marshall Islands commodity ship, against eight on Tuesday and a pre-war average of 130 to 140. A single dry-bulk carrier crossed Bab el-Mandeb, down from a normal 20. Iran’s Revolutionary Guards have reportedly been firing on ships that stray from authorised routes, which is a fairly efficient way of ensuring nobody tests the deal before it’s actually signed.
Nine Tankers and One Very Discreet Producer
The Houthis confirmed a second strike Wednesday, hitting the Saudi tanker Daisy in the Gulf of Aden, bringing their running total to nine Saudi tankers targeted since the 22 July blockade began. Saudi Aramco has yet to confirm damage from either the Wafa or Daisy strikes. Bloomberg, meanwhile, reports the UAE has moved more oil through Hormuz than any other producer over the past two months — Kpler tracked the ADNOC supertanker Romania Prosperity reappearing in the Gulf of Oman this week after switching off its transponder in late July, one of “dozens” of similarly quiet exits. Bloomberg calls it a “novel marketing drive.” It could also just be called doing business while nobody’s looking, which, in this war, appears to be the only business model that’s actually working.
The Economy Keeps Moving Anyway
The UAE’s non-oil PMI rebounded to a four-month high of 52.7 in July, up from June’s five-year low of 50.8 — proof, apparently, that businesses can adapt to almost anything except a slow news day, with new orders growing at their fastest pace since February and export orders expanding for the first time since March. Not every project is keeping pace, though — Wynn Resorts pushed the opening of Wynn Al Marjan Island back to September 2027 and disclosed a $600 million cost overrun, blaming regional conflict disruption, pricier materials, and Hormuz-driven shipping delays. Wynn has now put $1.06 billion into the joint venture, which is a lot of money to spend on a casino that currently can’t open until a war several thousand miles offshore decides to behave. Elsewhere, the US reclassified the UAE into its most permissive technology export tier, letting G42 and Core42 import sensitive computing equipment without per-transaction licences — a considerably bigger deal for the UAE’s AI ambitions than a casino opening a year late.
The Economist’s Verdict: Iran Has Already Won This Round
This week’s Economist leader makes an argument worth sitting with: no matter how the Hormuz deal lands, Iran has already secured the thing it wanted, which is leverage, not just access. Trump’s pattern has been talk, then threaten, then talk again — he’s given Iran “one last chance” more times than anyone’s still counting — while Iran holds out for near-total control of the waterway and its exhausted neighbours no longer expect it to soften. Saudi Arabia and the UAE are racing to build pipelines around the strait entirely, Iraq is diverting crude north, and there’s talk of a giant refinery built outside Hormuz altogether. The Economist’s own modelling suggests that even if every pipeline project finishes on schedule, five million of the fifteen million barrels a day that used to cross Hormuz before the war will still have no way through it by 2030 — and pipelines can be hit too, just like everything else in this war.
It gets worse for the commodities pipelines can’t carry. Qatar’s LNG, a fifth of the world’s supply, has no workaround at all. Gulf refineries stay largely cut off. And it’s not only exports — food and metals imports can’t be shipped cheaply overland either, which is the part of the ledger nobody outside the Gulf is watching closely. The Economist’s conclusion is the uncomfortable one: American bombs haven’t kept ships safe, a single drone strike is enough to spike insurance premiums and scare off shipowners, and the only realistic way through is a deal — however unbalanced, however much it hands Iran the transit fees it’s currently demanding. Buying time to build pipelines and defences that erode Iran’s leverage is, in this framing, the actual win available. Iran looks set to win this round. Whether it wins the longer war is still open — though it’s worth noting nobody in this conflict has yet lost a round they didn’t eventually relitigate.
Other Fronts Are Reopening Too
Two developments complicate the idea that this war is winding toward any tidy resolution. The Houthis said Thursday they launched a “large-scale” attack against Saudi-aligned forces in central Yemen, claiming hundreds killed or injured — the ceasefire between the Houthis and the Saudi-led coalition has technically held since 2022, but hostilities have flared repeatedly in recent weeks, including at sea. Riyadh hasn’t commented, which in this war has increasingly come to mean “noted, will address never.” Separately, Israel bombed southern Lebanon Wednesday after two of its soldiers were killed there, reviving a front that June’s US-Iran truce was supposed to have quieted alongside Hormuz. Neither story directly touches the UAE, but both are reminders that “the war is calming down” and “the war is escalating” are currently both true, depending which coastline you’re looking at.
On the American side, the Washington Post reported that Trump’s decision to call off last weekend’s planned strike partly came down to a shortage of key missiles and air-defence systems, and that Trump reportedly lashed out at Defence Secretary Pete Hegseth over being “misled” about weapons stocks. Trump denied any shortage in a Truth Social post Thursday, adding a warning about jail time for leakers — which is one way to handle a story you don’t like.
A Quieter Anniversary
Amid all of it, President Sheikh Mohamed marked the 60th anniversary of Sheikh Zayed’s accession as Ruler of Abu Dhabi on 6 August 1966, calling it the “beginnings that nurtured our collective journey” — a deliberate, well-timed reminder that some institutions in this region have outlasted rather more than one bad news week.
Watch Today
Whether Khamenei actually signs off on the Iran-Oman framework, and whether Washington finds a way to call Iranian control of inbound Gulf traffic a win.
Saudi confirmation or denial of damage from the Wafa and Daisy strikes.
Etihad and Qatar Airways resuming Bahrain and Kuwait flights Saturday — Emirates still has no restart date.
— Steve
Steve Moore
Emirates Wire · launching 9 September 2026, National Liberal Club, London
emirateswire.co.uk · steve@emirateswire.co.uk
A note on how this is made: Substack recently launched an AI-detection feature and published its policy on it, “Against Claudefishing” by CEO Chris Best. In that spirit, here’s our disclosure: Emirates Wire is reported, written and edited by Steve Moore. AI tools help with research aggregation and early drafting, but every fact is personally verified, and every sentence is personally approved before it goes out. Questions are welcome any time at steve@emirateswire.co.uk.