Mediators Say US-Iran ‘Close’ To ‘Resurrecting’ Failed MoU Deal, Pushing Oil Lower, Stocks Jump

Update(11:35ET): Here we go again… despite no evident change in war posturing on either side, and despite shipping traffic still largely at a complete standstill in the Strait of Hormuz, Fox News is out with claims that the failed Memorandum of Understanding (MoU) could be ‘resurrected’… bringing us back to the ‘deal is close’ constant headlines of earlier this summer (though of course the sides were never in reality close – and simply returned to a wider bombing campaign)…

“Mediators of the ongoing conflict in the Middle East believe the U.S. and Iran are close to a deal that would resurrect the failed memorandum of understanding, according to The Times of Israel,” Fox writes, based on the earlier Israeli media article. Negotiators from Pakistan, Egypt and Qatar have been haggling over an Oman-proposed Strait of Hormuz management plan. It will involve fee-collection and is backed by the Gulf states, supposedly. The timing of all of this interesting given Trump is currently hosting Netanyahu at the White House. More from Fox:

Iran and Oman — both of which are situated on the Strait of Hormuz — have reportedly signed off on the proposal advanced by the mediators.

The two sources said the White House was waiting to make a decision until after President Donald Trump meets with Israeli Prime Minister Benjamin Netanyahu on Tuesday.

Meanwhile…

JMIC: DATA INDICATES ZERO TANKERS IN EITHER DIRECTION OF HORMUZ

Still, the return to deal ‘optimism’ has pushed oil prices down further – which is perhaps the entire point of US officials anonymously hyping that a deal is ‘close’ once again.

And S&P futures briefly reached High of Day on the headline…

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US-Iran attacks have remained paused, and oil prices have extended their declines, as President Trump has claimed Tehran and Washington are now having “very friendly talks” while at the same time suggesting negotiations might not be prolonged.

“We are in very deep talks with Iran. If they don’t work out, we will go back to very strong military action,” Trump told Axios, as we highlighted previously. But possibly the most promising development in terms of an off-ramp is that Oman has presented Iran with a plan backed by Gulf states to manage the Strait of Hormuz.

This would reportedly include including collecting voluntary fees for using it, ​according to sources who spoke to Reuters Tuesday. The report notes that “The plan could serve as a basis to end the disruption to trade through the strait caused by the ‌U.S.-Israeli war on Iran.”

However, this also to some degree represents the stalemated situation going back to square one, given the United States has consistently and vehemently opposed any fees being collected that would go to Iran. An immediate response from Tehran on the proposal has not been forthcoming, and talks could drag on for days related to the Oman plan. Already Tehran is adding some strict conditions regarding frozen or seized Iranian assets abroad, per Bloomberg citing state media:

“Any company or country that receives funds from Iranian assets will not be allowed to pass through the strait,” semi-official Tasnim news agency cites a spokesman for Iran’s central military command as saying in response to recent US proposal.

Reuters provides more detail in the following: “The system would be analogous to one in place on Asia’s Strait of Malacca, where Indonesia, Malaysia and Singapore ask ships to pay voluntary contributions to fund navigation, environmental protection and search-and-rescue operations.”

“The Western diplomat compared it to a voluntary carbon tax for flights, where anyone buying a plane ticket can choose to tick a box if they want to pay to offset their emissions,” the report adds.

The Wall Street Journal has said this represents a “glimmer of hope” as fighting has halted since last Friday:

A U.S. official and mediators said Iran and Oman were still far apart on some issues, including whether to charge fees for transit. But both sides said there was progress, marking the first glimmer of hope for diplomacy since President Trump ordered a new round of military strikes on Iran more than two weeks ago in response to Tehran firing on commercial vessels in the strait. 

…The goal of the Iran-Oman talks is to agree on which route vessels can take through the 22-mile-wide strait. Conflict erupted earlier this month after the U.S. began guiding ships through the strait by hugging the Omani coast, while Iran wants vessels to cross through its territory. 

In the meantime President Trump had laid out Monday while speaking to reporters aboard Air Force One his view that there’s “plenty of time” to deal with Iran and that “we are talking right now..” He laid out that while “there’s a good chance that something could happen,” it remains that If not, “we go back to doing what we were doing two days ago.”

Trump has on Tuesday reiterated to Fox News that Iran understands it will never have a nuclear, and reaffirmed that the two sides are talking.

.@POTUS on Iran’s Pickaxe Mountain: “We have the greatest cameras in the world focused on [it]… I know exactly what’s going on at Pickaxe, it’s not a big problem. We took out their nuclear sites, and we’ll have to take out Pickaxe if we don’t make a deal. If we don’t make a… pic.twitter.com/PMdXaBkDvu

— Rapid Response 47 (@RapidResponse47) July 28, 2026

Over in Saudi Arabia, where missile and drone attacks out of Yemen (and possibly Iraq) over past days have damaged Aramco facilities, one regional media source says that “Saudi Aramco has shut down its Jazan oil refinery after a Houthi missile and drone attack damaged key facilities at the site, according to reports.”

“The refinery, which processes 400,000 barrels of crude per day, suffered damage to its Integrated Gasification Combined Cycle (IGCC) complex and tank farm area. Repairs are expected to be completed and operations to resume by Aug. 15, according to a note from consultancy IIR,” Turkiye Today adds.

Satellite imagery also shows alleged damage to gas storage tanks at Saudi Arabia’s Abqaiq facility, most recently to be hit targeted likely by the Houthis:

🔥 Satellite imagery shows damage to multiple gas storage tanks at Saudi Arabia’s Abqaiq (Buqayq) refinery. White and black cooling covers are also visible over two storage tanks to prevent spread.

Explore and Compare: https://t.co/TrYreAAiGB#SaudiArabia #Gas #Oil pic.twitter.com/qxwdaNKaBc

— Soar (@SoarAtlas) July 28, 2026

However, there still no official Saudi confirmation of Abqaiq being struck, but only that it was targeted:

🇸🇦 Contrary to social media reports, no Aramco or SPA statement has confirmed that Abqaiq was hit, quantified damage or alerted of a production halt.

Official Saudi report from the Saudi Press Association (SPA) only said drones “attempted to target oil facilities in Eastern… https://t.co/8wTv1uD6oF

— Drop Site (@DropSiteNews) July 28, 2026

As for the possibility of where things go from here, amid potential escalation which could see the Houthis further target Saudi oil complexes, President Trump had also warned in the aforementioned Fox interview that the US will “take out” Pickaxe Mountain if it doesn’t reach a deal with Iran.

He noted that Israeli Prime Minister Benjamin Netanyahu wants the US to stay involved in the Iran war, and the two leaders will meet Tuesday in the late morning hours at the White House.