Oil Falls After Iran Outlines Plan to Reopen Strait of Hormuz

Iranian state television on Wednesday outlined a draft U.S.-Iran framework that would see American naval forces withdraw from the vicinity of Iran and the U.S. Navy lift its blockade of the Strait of Hormuz. The report pushed West Texas Intermediate futures down about 2.7%, with prices sliding from roughly $93 to below $89 in about 30 minutes.

The state TV account listed six provisions intended to govern the strait during a proposed 60-day negotiation window. Under the draft, Iran would restore commercial transits to pre-war levels within 30 days. The terms call for joint management of shipping routes by Iran and Oman and exclude military vessels from those routes. The document says that if negotiators reach a final agreement within 60 days, the pact could be elevated into a binding United Nations Security Council resolution.

Iranian outlets described the memorandum as an ‘initial unofficial framework’ and cautioned that no steps would follow without tangible verification from Washington.

Before Iran’s restrictions, the Strait of Hormuz handled roughly 20 million barrels per day and about 125 to 140 commercial transits each day. The blockade had sharply reduced those flows; a verified return toward pre-conflict traffic levels would increase the volume of oil and shipments moving through the chokepoint.

Market participants and analysts noted the outline is a preliminary text rather than a binding deal. U.S. officials have said any arrangement must guarantee free passage without transit fees and include robust verification mechanisms to ensure safe transit. Observers described the process as phased, with reopening of the strait and a ceasefire prioritized while nuclear talks, sanctions relief and regional proxy issues would be addressed later. Many traders are pricing a limited reopening scenario rather than a comprehensive settlement.

Market commentator Jim Cramer observed that oil prices tend to fall less on signs of de-escalation and rise more sharply on renewed conflict risks.

For now, the proposals exist in the state TV broadcast and the draft text. The coming 60 days will determine whether either side converts the framework into concrete actions and verifiable guarantees that would allow shipping to return to pre-war levels.