Vice President J.D. Vance said Monday that he expects the U.S.-Iran deal to open the Strait of Hormuz toll-free in the long term, but shippers say the deal to cross the sea lane remains uncertain.
“Our expectation is that the strait will remain free and open for the long term, and that will emerge in the technical negotiations,” Vance said in an interview on CNBC’s “Squawk Box.”
Iranian state media announced that Hormuz would be open to free traffic for 60 days. The strait will then be controlled by Iran and Oman, according to Iran’s Tasnim news agency.
The United States and Iran are scheduled to sign a deal to end the conflict in Switzerland on Friday. President Donald Trump said the deal would open Hormuz toll-free in exchange for the US lifting its naval blockade against Iran.
Vance said Iranian Parliament Speaker Mohammad Bagher Ghalibaf and Foreign Minister Abbas Aragushi will represent Iran in the negotiations.
“There are a lot of very important details to figure out,” the vice president said. “We’re actually going to sit down at the table and discuss it together and figure out a path forward on these details.”
Mr Vance said ship traffic passing through Hormuz had already increased in the past 24 hours. Ship tracking company Kpler has not observed a significant increase in transits or large-scale spills from the Persian Gulf, said Matt Smith, the company’s director of commodity research.
The CEO of oil tanker company Frontline told CNBC on Monday that he believes “once the deal is signed, the vessels will start moving very quickly.” Lars Barstad said: “We would have liked to see clearer wording regarding the traffic protocols and we hope that will be achieved in the coming days.”
Frontline operates a fleet of 80 vessels worldwide. Five tankers are stranded in the Persian Gulf.
Global shipping industry group Bimco warned that statements from the United States and Iran about the deal were unclear and did not provide enough information about the timing or safe route through Hormuz.
“Due to the lack of details and the overly optimistic reassurances we have provided so far, we believe that the security situation for the shipping industry remains precarious and it remains extremely dangerous for ships to begin transiting at this time,” said Jacob Larsen, Vimco’s chief safety and security officer.
Larsen said the mine threat in Hormuz remains a major concern. Secretary of State Marco Rubio told Congress earlier this month that Iran has mined much of Hormuz.
Niels Rasmussen, Vimco’s chief shipping analyst, said it would likely take several weeks for the hundreds of ships stuck in the Persian Gulf to sail through Hormuz.
“Last week we saw an increase in the number of ships passing through the Strait, but there is no sign yet that the situation has changed with the announcement of the agreement,” Rasmussen said.
