Hormuz standoff: Oman’s cancelled talks show why diplomacy has limits

Iran and a group of Gulf Arab states were scheduled to sit down in Salalah, Oman, today to discuss security arrangements around the Strait of Hormuz, in what would have been one of the few multilateral forums to bring Tehran and its neighbours to the same table since the crisis began. However, the conference was postponed indefinitely late last night.

Omani Foreign Minister Sayyid Badr Albusaidi described the postponement as being made "in the interests of consensus". Iranian state media went further, confirming that Tehran and Muscat had agreed to the delay jointly, after several unnamed neighbouring governments requested it. Delegations from Iraq, Saudi Arabia and Qatar had been expected to attend, and Omani officials had spent weeks quietly shuttling between capitals to secure their participation. What forced the cancellation, however, was the deteriorating security situation.

Days before the talks were due to open, drone strikes launched from Iraq hit Saudi Arabia's East-West Pipeline, a 7 million barrel-a-day artery that lets Riyadh bypass Hormuz entirely en route to Red Sea terminals. The line was shut down, removing at a stroke the one major alternative Gulf producers have relied on whenever the strait itself grows too dangerous to use. Hours before Albusaidi's announcement, an Iranian cargo vessel was struck off Qeshm Island, killing one person and injuring four, while the UK Maritime Trade Operations body reported a separate attack on a transiting vessel that started a serious fire. Omani officials reportedly concluded that convening the meeting while attacks continued unabated would not serve its purpose.

Underneath the immediate shocks sits a harder problem: the Gulf states cannot agree on how to deal with Iran. The UAE held preliminary side conversations with Tehran at the BRICS summit in New Delhi, continuing a pattern of quiet engagement Abu Dhabi has pursued for several years. Bahrain, by contrast, refused outright to meet Iranian officials, citing repeated missile and drone attacks on its territory. Saudi Arabia and Qatar occupied an uneasy middle ground, willing to attend but wary of appearing to legitimise Tehran's position on the strait. That split made a unified Gulf position difficult to assemble even before the pipeline was hit, and it is unlikely to resolve itself simply because the meeting has been rescheduled.

Oman had proposed a 50-50 joint management arrangement for the strait, with voluntary transit fees modelled on the Strait of Malacca. Iran rejected the voluntary element, demanding compulsory contributions and pushing shipping lanes nearer its own coast, a demand Gulf states read as an attempt to entrench control rather than share it. Foreign Minister Abbas Araghchi reaffirmed that Iran would not reopen the strait until Washington lifted sanctions and unfroze Iranian assets, terms the Trump administration has ruled out without nuclear concessions. Iranian officials had privately conceded before the talks collapsed that a signed agreement was unlikely regardless, which raises the question of what continuing to schedule the conference was meant to achieve in the first place.

Markets absorbed the news quickly. Brent crude rose 3.1 per cent to $107.87 a barrel, having briefly touched $110, while US benchmark WTI gained 2.8 per cent to $102.87. Iran's blockade continues to constrain roughly a fifth of global petroleum and LNG shipments, and US Central Command says it has redirected 101 commercial vessels as of September 13 in its own counter-effort. The pressure is not confined to Hormuz either: Iranian-backed Houthi fighters have seized Mokha and Perim Island in the Bab al-Mandeb Strait, opening a second front against Red Sea shipping and giving Tehran's allies leverage over an alternative chokepoint just as the primary one grows more volatile.

Trump has pushed to reopen Hormuz before the midterms, but Iran shows no sign of yielding to that pressure, and neither Riyadh nor Abu Dhabi has the leverage to force a settlement neither Washington nor Tehran wants to make.