By: AGBI

Oil prices fell in early trading on Wednesday after Oman and Iran announced plans to establish a temporary joint maritime corridor and clear mines in the Strait of Hormuz.

Brent crude futures fell 2.5 percent to $86.39, while US West Texas Intermediate crude declined 2.4 percent to $80.38.

Both benchmarks erased early gains on Tuesday and ended the day down more than 3 percent.

In a joint statement issued on Tuesday, the Omani and Iranian foreign ministers said their talks focused on resuming safe navigation through the strait.

The proposed framework includes establishing a temporary joint navigational corridor and launching a project to clear the waterway of mines, the state-run Oman News Agency reported.

Technical negotiations will continue to finalise a permanent navigational corridor and determine the strait’s future administration, the statement said.

Earlier this month, Iran said it had reached an agreement with Oman on the coordinates for a proposed shipping route through the strait.

US treasury secretary Scott Bessent announced Operation Economic Outcast on Monday, saying the administration is preparing to act against every “node, facilitator and network” that has helped Iran smuggle oil and evade sanctions.

In a Truth Social post on Tuesday, President Donald Trump said the US navy had removed or detonated all mines from international waters in the strait.

“Iran has been notified that any ship or boat placing new mines will be immediately and systematically destroyed,” he said.

Mitsuru Muraishi, an analyst at Fujitomi Securities, told Reuters: “The market continues to react to developments surrounding navigation through the Strait of Hormuz, and hopes for progress in talks between Iran and Oman have triggered selling.”

Saudi Arabia’s benchmark stock index, the Tadawul, rose 0.5 percent on Tuesday, up for a sixth straight session. Abu Dhabi’s ADX edged up 0.2 percent, but Dubai’s DFM General Index fell 0.5 percent.

The Qatar and Bahrain bourses were up, but Kuwait and Oman ended flat.