U.S.-Iran Negotiating Deadline Expires as Strait of Hormuz Traffic Remains Reduced
The 60-day period under the June 18 U.S.-Iran memorandum ended without a permanent agreement as shipping volumes and Persian Gulf oil flows remained far below prior levels.
Published 2026-08-19 · AI-assisted research and writing
Negotiations and shipping
The 60-day negotiating period in the U.S.-Iran memorandum of understanding dated June 18 expired during the week of August 17 without a permanent settlement, according to the Associated Press.
President Donald Trump said on August 18 that the United States had no talks planned with Iran. He also said the Strait of Hormuz was open and operating, an assertion not independently substantiated by the available shipping data.
Kpler data cited by AP recorded 95 confirmed Strait crossings in the latest week, down 19.5%. Three vessels crossed on Sunday, all using the Iranian-designated route; no crossings were recorded through Omani routes.
On August 18, UK Maritime Trade Operations reported that an unidentified projectile damaged a ship’s engine room near Oman and caused an unspecified crew casualty. The Omani Coast Guard assisted the vessel, while the ship’s identity, cargo, attacker, and the severity of the casualty remained undisclosed.
Energy disruption
The U.S. Energy Information Administration estimated oil and petroleum-liquid traffic through Hormuz averaged 4.9 million barrels per day in the second quarter of 2026, compared with 21.6 million barrels per day in the fourth quarter of 2025. That represents a reduction of about 77%.
EIA estimated Persian Gulf producers shut in 5.46 million barrels per day of output during July. Available Saudi and Emirati bypass pipelines cannot replace normal Hormuz capacity, leaving production dependent on an eventual recovery in maritime transit.
EIA assumed severe transit constraints would continue through August and that flows would begin increasing slowly in September. This forecast depends on shipping conditions improving; further attacks or threats could alter the production outlook.
EIA raised its third-quarter Brent forecast to about $85 per barrel, $11 above its July forecast, citing disruption-driven draws on global inventories. It also increased its 2026 wholesale diesel-price forecast by 8.5% and its gasoline forecast by 5.9% from July.
Before the disruption, Hormuz carried roughly one-quarter of seaborne oil trade and more than one-fifth of global liquefied natural gas trade, according to EIA’s chokepoints analysis. Asian importers received most crude oil moving through the strait.
Maritime diplomacy
Iran and Oman established a foreign-ministry process on June 23 to negotiate navigation administration, services, and associated costs. The joint statement named Iranian Foreign Minister Abbas Araghchi and Omani Foreign Minister Badr al-Busaidi among the participants.
With no U.S.-Iran talks scheduled, the Iran-Oman process is the principal identified diplomatic channel concerning maritime navigation. Its final terms, legal compatibility, and U.S. acceptance remain uncertain.
Reuters reported on August 17 that Iran could move to a fully offensive posture in Hormuz if diplomacy failed, citing an unnamed senior Iranian official. No public Iranian decree or independently verifiable operational definition of that posture was identified.
The available evidence shows that vessels continue to transit Hormuz, though at sharply reduced volumes and amid unresolved security risks. Investigators have not attributed the August 18 ship attack, and the timing of any return to direct or mediated U.S.-Iran negotiations remains unknown.