According to WPB, Iran’s proposal to control inbound traffic through the Strait of Hormuz while receiving advance information about outbound vessels introduces a more detailed operating model for reopening the waterway. The arrangement being discussed with Oman would not restore the system that existed before the crisis. It would create a managed passage in which ships entering the Persian Gulf would use a route controlled by Iran, while vessels leaving would follow a route between Iranian and Omani waters and receive exit clearance through Oman after Iran had been notified.
The proposal remains under negotiation and its final form could change. Iran has already moved away from its earlier demand for complete control over traffic in both directions, but it continues to insist that the inbound lane must address its security concerns. Tehran also wants visibility over outbound traffic and the ability to intervene under certain circumstances. Oman would assume a central operational role by granting clearance for vessels leaving the Gulf, although the available information does not yet explain how applications, approvals, delays or disputes would be handled.
This structure would add a new administrative layer to the existing Traffic Separation Scheme. The current routing system was proposed by Iran and Oman and adopted by the international shipping body in 1968 to separate vessels moving in opposite directions and reduce collision risk. The emerging proposal appears to retain separate inbound and outbound movements but would introduce national notification and clearance procedures that did not apply to routine commercial traffic before the conflict.
In practical terms, an Iranian-controlled inbound lane would likely require vessels to provide identifying information before entering. This could include the ship’s flag, ownership and management details, cargo, destination, expected arrival time and security status. The precise reporting requirements have not been published, so this remains an operational assessment rather than a confirmed part of the proposal. Any system would also need defined communication channels, response times and procedures for vessels that lose contact or arrive outside their approved transit window.
Outbound oversight may be more complicated. The current proposal would allow ships to leave through a route associated with Oman, but only after notification to Iran. Oman’s clearance could therefore depend on information exchange between two national authorities. Shipowners would need to know whether Omani approval alone would be legally and operationally sufficient, how long Iran would have to raise an objection, and what conditions could trigger Iranian intervention.
These details will determine whether the arrangement is accepted by commercial shipping. A formal announcement that Hormuz is open would not be enough for a shipowner to approve a voyage. Owners, charterers, flag states, crews, insurers and cargo interests would each conduct their own risk assessment. They would examine the security of both lanes, the clarity of the clearance process, the possibility of detention and whether vessels could be stopped after receiving permission from Oman.
The current traffic level shows why political progress should not be confused with commercial normalization. Only eight vessels passed through Hormuz on August 5, including five tankers and three bulk carriers. Six were entering the strait and only two were leaving. Before the crisis, the normal level was approximately 130 to 140 vessel transits per day. Some vessels may not appear in publicly available tracking data because their transponders are turned off, but the visible difference remains substantial.
The low count indicates that most companies are still unwilling or unable to operate on the route. A few successful passages do not establish a regular shipping market. Commercial recovery requires repeated, incident-free transits involving different flags, vessel types, owners and cargoes. It also requires freight quotations that remain valid long enough for traders to conclude contracts and nominate ships.
Insurance is likely to remain one of the main barriers after any initial agreement. War-risk coverage is arranged separately from normal marine insurance and may be quoted for short periods because security conditions can change rapidly. Recent market practice has included sharply higher premiums and quotations with very limited validity. Insurers may reduce rates after a reopening, but they are unlikely to return immediately to pre-crisis terms without evidence that the procedures work and that ships are no longer being attacked, detained or redirected.
The division of authority could itself preserve part of the risk premium. Insurers will assess whether Iran and Oman use compatible rules, whether approvals can be verified and whether military forces operating in the area recognize the same transit process. An agreement between coastal states may reduce the probability of an intentional attack, but it may not eliminate misidentification, communication failures or intervention by forces outside the clearance system.
Maritime industry guidance already requires companies to examine commercial, insurance, war-risk and charter-party consequences before approving a Hormuz transit. Operators are also expected to review current threat information, determine their approach to public tracking signals and prepare voyage-specific security plans. These requirements would continue under a managed reopening and could become more detailed if inbound and outbound permissions are handled differently.
For bitumen shipping, the distinction between official reopening and commercial return is particularly important. Bulk bitumen depends on a relatively small fleet of specialized vessels equipped with insulated tanks, heating coils, cargo pumps and temperature-control systems. A conventional product tanker cannot automatically replace a bitumen carrier that rejects a Gulf nomination. Even a modest reduction in the available specialized fleet can therefore tighten freight more rapidly than in larger crude or clean-product tanker markets.
Bitumen cargoes also have less tolerance for unpredictable delays. The product must remain heated during transportation and retain a suitable temperature for discharge. A vessel waiting for inbound authorization, outbound clearance or resolution of an objection must continue operating its heating systems and consuming fuel. Longer waiting periods increase voyage costs and can create technical difficulties if machinery reliability or fuel availability becomes a concern.
A managed system could improve conditions if it produces predictable approval windows. A supplier could coordinate terminal readiness with the ship’s authorized arrival, and the buyer could calculate freight and delivery dates more accurately. However, a process based on individual vessel permission could also restrict flexibility. Replacing a nominated ship, changing a loading date or transferring a contract to another owner might require a new review.
Iranian bitumen exporters would receive the most immediate benefit if the inbound lane allowed specialized vessels to reach loading terminals consistently. More reliable access could reduce cancelled nominations, restore competition among shipowners and narrow the difference between FOB prices and delivered costs. Iranian sellers could also regain greater access to India, East Africa, Southeast Asia and other markets that have reduced their exposure to Gulf cargoes.
However, Iranian control of the inbound route may create additional concerns for some owners. Companies will want assurance that entering the Iranian-administered lane does not expose them to sanctions, contractual disputes or conflicting instructions from other authorities. They will also need confirmation that permission to enter creates a dependable right to leave through the Omani process.
Iraqi cargoes face a similar geographic problem even though they are loaded outside Iran. Crude oil and heavy products exported from Basrah must leave the Persian Gulf through Hormuz. Iraq’s recent need to offer major crude discounts demonstrated the cost attached to finding buyers and vessels willing to accept this route. A managed reopening could reduce that penalty, but Iraqi bitumen would not automatically become cheaper until specialized freight, insurance and waiting costs also decline.
Kuwait and Bahrain have limited alternatives for seaborne bitumen and heavy-product exports. Their cargoes would depend on access to the Iranian-controlled inbound system for empty ships and on Omani clearance for loaded vessels leaving the Gulf. Any imbalance between the speed of inbound and outbound approvals could create congestion at loading terminals or anchorages.
The United Arab Emirates has a more varied position. Fujairah is located outside Hormuz and provides an alternative outlet for part of the country’s energy trade. However, not every bitumen cargo produced or stored at facilities inside the Gulf can be redirected automatically to Fujairah. Heated storage, dedicated transfer systems, compatible pipelines, quality control and specialized marine loading equipment are required. UAE terminals located inside Hormuz would remain exposed to the same managed transit process as other Gulf exporters.
The proposal could also change contract terms. Sellers may seek longer loading windows because arrival permission is uncertain, while buyers may demand protection against delays caused by national authorities. Charter parties could include more detailed clauses covering clearance refusal, route changes, detention, additional insurance and demurrage. Disputes may arise over whether a delay resulted from a political restriction, a security decision or the shipowner’s own risk policy.
A successful reopening would therefore need more than an agreement between Iran and Oman. The system would require published instructions, recognized contact points, standard vessel-information requirements, clear response times and procedures for emergency passage. Owners would also need confidence that clearances remain valid throughout the transit and cannot be withdrawn without a defined security reason.
The first reliable signs of commercial recovery would include a sustained increase in tanker passages, the return of specialized bitumen vessels, longer validity periods for freight offers and lower additional war-risk charges. Regular movement by vessels from several ownership groups would be more significant than a small number of controlled or exceptional passages.
The Strait of Hormuz carried an average of 20.9 million barrels per day of oil during the first half of 2025, equivalent to approximately 20% of global petroleum-liquids consumption. Existing bypass routes can handle only part of the normal volume, and specialized petroleum products have fewer alternatives than crude oil. The economic importance of reopening is therefore substantial, but the quality of the operating system will matter as much as the political announcement.
For the bitumen market, a managed reopening could be the first step toward restoring Gulf supply, but it would not guarantee immediate price relief or reliable delivery. Iran’s control of inbound movement, Omani clearance of outbound traffic and the possibility of intervention would create a system that commercial shipping has not yet tested. The effect will depend on whether the process is transparent, predictable and accepted by insurers and shipowners.
The central issue is no longer simply whether Hormuz will be declared open. It is whether vessels can enter, load and leave without facing unclear authority, changing permissions or unacceptable financial exposure. Until that standard is demonstrated across repeated voyages, the formal reopening of the strait and the commercial return of bitumen shipping will remain two separate developments.
By WPB
News, Bitumen, Strait of Hormuz, Iran, Oman, Maritime Shipping, War-Risk Insurance, Gulf Exports, Tanker Clearance, Asphalt Market
