WRAPUP 4-Proposed Hormuz deal would give Iran control of inbound traffic, sources say

Iran and Oman are reportedly negotiating a deal that would give Tehran control over ships entering the Gulf through the Strait of Hormuz, a key trade route for energy supplies.

A proposed deal between Iran and Oman ‌would ​give Tehran control over ships entering the Gulf through the Strait of Hormuz, a senior Iranian source and two regional officials told Reuters on Wednesday, in one of the biggest concessions yet to Iran. Despite the apparent step towards yielding to Iranian demands, the sources pushed back against assertions by U.S. President Donald Trump that a deal reopening the strait was imminent. Iran later reported "significant progress" in the ‌talks with Oman over transit routes, saying both inward and outward journeys would pass through Iranian waters. U.S. officials have repeatedly said that they would never accept any arrangement that lets Iran control access to the world's most important trade route for energy supplies. "The concession has already been made regarding some form of control over Hormuz," one of the regional sources told Reuters.

The other regional source said there were still details to be determined about how "control" would be defined, with Gulf negotiators insisting regional countries supervise inspections of ships, and that any payment of fees ‌be voluntary. IRAN SAYS PROGRESS ON VERGE OF BEING FINALISED

The senior Iranian source said the text of an agreement already on the table envisioned Iran having control of ships heading into the Gulf through the strait, and one of the main sticking points ‌was what role Iran would also have over ships heading in the opposite direction. Iran's Deputy Foreign Minister Kazem Gharibabadi said later in comments to Iran's official IRNA news agency: "A significant portion of this new route is located in Iranian territorial waters, and a part of it is in Omani territorial waters. "It is designed in such a way that commercial ships will pass through Iranian territorial waters, both on the inbound and outbound legs of their journey." He said the talks with Oman had "reached fundamental understandings" on issues including the map of the routes for the entry and exit of maritime traffic. "This progress is on the verge of being finalised." OIL EDGES DOWN Months ⁠of U.S. military ​efforts, including a two-week campaign of strikes in July, have not broken ⁠Iran's grip on the strait. U.S. commanders advised Trump in July that they were running low on supplies of some munitions. Reuters reported on Tuesday that the U.S. Army had used up nearly all of its long-range precision missiles. Trump and senior officials in his administration have said in recent days that a deal is imminent to ⁠end the war he launched in February and which polls show most U.S. voters oppose.

There was no immediate reply from Washington about any proposed agreement. Oil prices edged lower on Wednesday after ticking higher following the Iran-aligned Houthi movement in Yemen saying it had fired on a Saudi-flagged tanker in the ​Red Sea, the latest attack on Middle East shipping that has disrupted global energy supplies. Crude prices have plunged over the past two days after Trump called off fresh attacks on Iran citing talks he said could end the conflict.

U.N. URGES PROGRESS Trump ⁠told Fox News' "@ Night with Trace Gallagher" programme that talks were "moving along nicely" and "an all-day negotiation" had taken place on Tuesday.

The Strait of Hormuz "is going to be open very soon", Trump added. Over the weekend Trump cited the negotiations as the reason for a decision to call off plans for "massive attacks" on Iran, a pattern he has repeated numerous ⁠times ​throughout the war.

An Iranian source said: "The devil is in the details. A single tweet from Trump could cause the whole thing to collapse." At a regular briefing in New York, deputy U.N. spokesperson Farhan Haq said the United Nations had received no first-hand information about a possible reopening of the Strait of Hormuz, but added: "We certainly encourage the parties to move forward with any effort to have a negotiated solution to the issue."

An agreement that gives Iran any control over access to the strait would mean the war launched by ⁠the United States and Israel had resulted in a major shift in the balance of regional power in Tehran's favour. Before the war, the strait was freely open to all ships with no fees. But Trump, who initially said "Operation Epic Fury" would end ⁠in Iran's "unconditional surrender" with him approving the choice of its leader, has been under ⁠pressure to find a way out of a war U.S. voters now oppose two-to-one. According to the senior Iranian official, Iran is seeking fees of between 5% and 7% of the price of cargoes from ships using the strait. Oman is discussing smaller fees of around 3%, while Washington wants no fees at all.

Making any fees voluntary, at least nominally, could be a way out of the ‌impasse, although an implied threat of Iranian attacks ‌could mean shippers would be unlikely to risk transit without paying. (Reporting Menna Ala El Din, Elwely Elwelly and by Reuters bureaux; Writing by ​Peter Graff; Editing by Hugh Lawson, Alison Williams and Sanjeev Miglani)