Toplines

The factional nature of Iranian decisionmaking is likely slowing Tehran’s approval of the draft Iran-Oman agreement covering vessel traffic in the Strait of Hormuz. There are conflicting reports of whether the regime has finalized the draft agreement. Axios reported on August 4 that Iran’s leadership approved the agreement.[1] Two unspecified regional officials told the Associated Press on August 5, however, that Supreme Leader Mojtaba Khamenei had not approved the agreement.[2] This round of negotiations — like the others before it — has reportedly taken place without the presence of the Islamic Revolutionary Guards Corps (IRGC).[3] A faction of anti-concessions Iranian leaders, likely from the IRGC and led by IRGC Commander Major General Ahmad Vahidi, are close to the supreme leader and have consistently won policy arguments since the war began. One of the few times the IRGC did not win this argument was when Iranian President Masoud Pezeshkian successfully convinced the supreme leader to accept the Memorandum of Understanding (MoU) in June by offering his resignation as president. The repeated insistence of Iranian officials that the Iran-Oman talks only cover technical transit arrangements further indicates that the regime has not yet reached consensus on the agreement.[4]

This lack of consensus on the agreement likely reflects the regime’s internal divisions over negotiations.[5] ISW-CTP assessed on July 28 that three groups are competing to shape Iran’s negotiations policy: an anti-concessions faction likely led by Vahidi that supports talks but rejects any agreement that limits Iranian control over the strait; a pro-concessions faction that includes Iranian President Masoud Pezeshkian, Foreign Affairs Minister Abbas Araghchi, and Parliament Speaker Mohammad Bagher Ghalibaf and is more willing to compromise to reduce economic pressure; and the ultra-hardline Paydari (Stability) Front, which opposes negotiations with the United States altogether.[6] All these factions agree that Iran must maintain a certain level of control over the strait; their differences are related to tactics, not strategic objectives.

The emerging Iran-Oman arrangement will reportedly give Iran a greater role in controlling traffic through the strait than Iran had before the war. Axios reported on August 4 that the agreement stipulates that inbound vessels will travel through Iranian waters, while outbound vessels will use a route through Omani waters “in coordination with Iran” for sixty days while mines are cleared from the recognized transit scheme.[7] Iranian Deputy Foreign Affairs Minister for Legal and International Affairs Kazem Gharibabadi described a broader Iranian role on August 5, however.[8] Gharibabadi stated that vessels would also travel through Iranian waters during part of their outbound passage before continuing through Omani waters.[9] Gharibabadi added that the new arrangement would replace both existing temporary routes, referring to the US-facilitated southern route through Omani waters and the route through Iranian waters that Iran has coerced vessels by force to use in recent months.[10] Gharibabadi’s description therefore suggests that Iran is seeking more direct control over outbound traffic than what Axios described on August 4.[11] A regional source told Reuters on August 5 that the unspecified ”parties” had already accepted some form of Iranian control over the strait but did not provide further detail.[12] Iran is likely seeking to convert the temporary leverage it gained by disrupting maritime traffic into a lasting role in managing the waterway, which would allow the Iranian regime to monitor vessel traffic, pressure adversaries, and threaten renewed disruption of the strait during future crises. ISW-CTP previously assessed that Iranian control of the strait is detrimental to global commercial interests because it enables Iran to selectively determine which vessels may pass through the strait and at what cost.[13]

Iran is likely linking any lifting of restrictions on traffic through the strait to both US economic and strait-related concessions. Lifting restrictions on the strait without US concessions would weaken Iran’s bargaining position in negotiations while leaving the US blockade, sanctions, and other economic pressure in place. Unidentified Iranian sources told Iranian media on August 5 that Iran would not reopen the strait unless the United States ended its attacks on Iran, addressed the alleged US MoU “violations,” met Iran’s conditions, and provided guarantees that the United States military would not attack Iran.[14] Iran notably viewed any strait transit that crossed without its approval as a violation of the MoU, which suggests that Iran is seeking even more significant strait-related concessions. Iran likely calculates that restoring normal traffic through the strait before securing economic benefits and its concessions to its control of the strait would reduce the costs that the conflict imposes on the United States and regional states and thus weaken the US incentive to make concessions. The Financial Times reported on August 4 that the United States would lift its naval blockade and ease restrictions on Iranian oil exports if Iran agreed to reopen the strait, according to a person briefed on the recent talks.[15] Axios also reported on August 4 that the temporary Iran-Oman arrangement concerning the strait could facilitate renewed ceasefire and nuclear negotiations.[16] The regime likely views the strait agreement as an initial step as part of a broader and more comprehensive agreement related to the strait and will not give up substantive leverage without a broader agreement.