The mullahs are folding. Iran has signalled it will reopen the Strait of Hormuz, a move that only makes sense if a deal to halt the fighting is imminent. This is not a goodwill gesture. It is a tell.
Diplomatic sources in the Gulf tell me the backchannel talks, mediated by Oman and Iraq, have reached their final stage. A ceasefire could be announced within 48 hours. The reopening of the strait is the quid pro quo for sanctions relief and a face-saving exit for Tehran’s hardliners.
Let’s be clear about what this means. The strait is the world’s most critical oil chokepoint. Iran shut it three weeks ago, sending Brent crude above $120. The economic shockwave was felt from Beijing to Berlin. Western navies mobilised. The US and UK put warships on standby. Now, Tehran is standing down.
Why the sudden change? Two reasons. First, the IRGC has taken a battering. Drone strikes on its naval facilities near Bandar Abbas crippled its ability to enforce the blockade. Second, the clerical leadership fears a domestic backlash. The Iranian rial has tanked. Bread queues are growing. The regime knows it cannot win a long war of attrition.
But don’t mistake this for a surrender. The deal being negotiated is likely a frozen conflict, not a victory for anyone. Iran will keep its proxies in Yemen and Syria. It will retain its nuclear infrastructure. In return, the Gulf states and the West will lift sanctions and guarantee Iranian oil exports. Cynical? Yes. But that is how the Middle East works.
The immediate impact? Oil prices will crash. Expect Brent to drop below $100 within a week. Global markets will rally. But the real test is whether the truce holds. There are hardliners on both sides who want this war to continue. The next 72 hours are critical.
Downing Street has been tight-lipped, but I am told the PM’s private view is that this is a strategic win for the West. The blockade was always an act of desperation. Now, Iran has blinked first. The game moves on.
For now, the tankers will start moving again. But in Whitehall, they are already drawing up plans for what comes next. The fight for the future of the Gulf is not over. It is just entering a new phase.
