Oil prices fluctuate! Iran to meet with six Gulf states, ceasefire on the west coast of the Red Sea – signs of easing tensions in the Middle East.

Two of the world's most sensitive shipping lanes have seen significant developments simultaneously. The foreign ministers of Iran and Gulf states plan to meet next week to seek a temporary agreement on the Strait of Hormuz; meanwhile, the Houthi rebels in Yemen announced a cessation of fighting off the west coast of the Red Sea. The combined impact of these two developments has directly driven up international oil prices.

According to CCTV International News, citing the Financial Times, the foreign ministers of the six Gulf Cooperation Council (GCC) countries plan to meet with Iranian Foreign Minister Araqchi in Salalah, Oman, on September 14 (next Monday). The meeting, led by Oman, aims to secure support for a provisional agreement to regulate the passage of merchant ships through the Strait of Hormuz. Meanwhile, according to CCTV News, the Houthi Supreme Political Council in Yemen issued a statement saying that fighting in the western provinces of the Red Sea has ceased and called on all parties to pressure Saudi Arabia to prevent further escalation of the situation in the region.

International oil prices fell in response to the news, with Brent crude dropping nearly 2.0% to $105.57 per barrel. Meanwhile, Bitcoin fell below $77,000, and US stock futures rallied across the board. Spot gold rose 1% to $4,357.59 per ounce.

Salalah Meeting: Hormuz Agreement Seeks Multilateral Endorsement

According to the Financial Times, citing two sources familiar with the matter, the meeting is scheduled to take place on September 14 in Salalah, Oman. One of the sources said that details of the meeting have not yet been finalized, but several countries have confirmed their attendance, and the meeting is expected to proceed as scheduled.

This will be the first meeting between senior diplomats from the six Gulf Cooperation Council (GCC) member states and senior Iranian officials since the US-Israel war against Iran in February. The GCC members include Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Bahrain, and Oman. Despite Iran's previous missile and drone attacks on its Arab neighbors, Saudi Arabia and the UAE have maintained diplomatic channels with Iran.

According to sources, Iran and Oman hope to leverage the endorsement of the Gulf Cooperation Council (GCC) to pressure the United States to lift its blockade of Iranian ports. For the GCC member states, the key objective is to ensure that any agreements are temporary and guarantee the normal passage of merchant ships through the strait.

About two weeks ago, Tehran and Muscat publicly stated that they were finalizing a temporary arrangement—merchant ships would enter the Strait of Hormuz via Iranian waters and exit primarily through Omani territorial waters. Omani territorial waters straddle the Strait of Hormuz, giving it a unique geopolitical advantage in this mediation effort.

The differences between the US and Iran remain deep, and there are many obstacles to a full reopening of the Strait.

Despite the increasingly positive momentum in mediation efforts, diplomats warn that a full reopening of the Strait of Hormuz still depends on an agreement between the United States and Iran.

According to the Financial Times, citing sources familiar with the matter, the United States has made it clear to the mediators that it will not return to the memorandum of understanding signed between the US and Iran in June this year, but insists on reaching a more comprehensive agreement that must cover nuclear-related issues.

Iran insists that even if an agreement is reached with Oman on the Straits issue, it will only allow a full reopening of the Straits after the United States meets its conditions. Iran's conditions include: lifting the blockade on its ports, restoring the waivers allowing it to sell oil, and permission to use some of its frozen overseas assets.

Previously, the US and Iran signed a memorandum of understanding in June, originally planning to extend the ceasefire for 60 days, gradually reopen the Strait of Hormuz, and push for final negotiations on ending the war and Iran's nuclear program. However, both sides subsequently accused each other of violating the agreement—part of the dispute stemming from disagreements over the transit of merchant ships—leading to a renewed escalation of the situation. Currently, there are no direct negotiations between the US and Iran, but mediators are maintaining diplomatic channels between the two sides. It has been reported that a Qatari delegation visited Tehran twice last week to push for a new round of diplomatic proposals.

Houthi ceasefire statement: Signs of easing tensions in the Red Sea

According to CCTV News, the Houthi Supreme Political Council in Yemen issued a statement saying that fighting in the provinces along the western coast of the Red Sea has ceased, and claimed that "the armed forces previously mobilized by Saudi Arabia to threaten relevant areas of Yemen have been driven out."

In a statement, the Houthi rebels called on all sides to pressure Saudi Arabia to halt the deployment of additional armed forces and personnel to sensitive areas such as the western coast of the Red Sea, in order to maintain navigational safety and prevent escalation. As of press time, Saudi Arabia has not responded.

This statement comes against the backdrop of the Houthi offensive, aimed at strengthening control of the Bab el-Mandeb Strait—another crucial global maritime trade route. The simultaneous tensions in these two strategic waterways are a significant driver of Brent crude oil prices rising to $105 per barrel.

Market focus: Will the interim agreement be implemented?

For the energy market, the most critical question right now is whether the Salalah meeting next Monday can push for substantial progress on the Hormuz interim agreement.

Trump had previously claimed that the Strait of Hormuz was open, but according to the Financial Times, energy exports from Gulf countries are still severely hampered, and imported goods through the waterway are also unable to pass normally.

Whether the current diplomatic window can be transformed into a workable agreement remains to be seen, depending on several variables: whether the Gulf Cooperation Council can reach a consensus at the Salalah meeting, whether the US will soften its stance on Iran's conditions, and whether the Houthi ceasefire declaration can be recognized by all parties and consistently implemented. Investors are currently closely watching the subsequent impact of these developments on oil price trends.

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