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watch nowVIDEO05:47Vice President JD Vance: Expect Strait of Hormuz to be opened ‘in a toll-free way for the long term’Squawk Box
Vice President JD Vance said Monday that he expects the U.S.-Iran deal will open the Strait of Hormuz without a toll system for the long term.
“Our expectation is that the strait is going to be opened in a toll-free way for the long term, and that’s the sort of thing that we’re going to figure out in these technical negotiations,” Vance told CNBC in an interview.
Iranian state media has said Hormuz will open to toll free transits for a 60-day period. The strait will be managed by Iran and Oman after that period, according to Iran’s Tasnim news agency.
The U.S. and Iran are expected to sign an agreement to end the conflict on Friday in Switzerland. President Donald Trump said the deal opens Hormuz without tolls in exchange for the U.S. ending its naval blockade against Iran.
Vance said ship traffic through Hormuz has already increased over the past 24 hours. CNBC could not immediately verify those claims.
The CEO of the oil tanker company Frontline told CNBC on Monday that he believes “vessels will start to move very quickly once a deal is signed.” Lars Barstad said he would have wanted “clearer language around the transit protocol, but that will hopefully come over the next few days.”
Frontline operates a fleet of 80 ships worldwide. Five of its tankers are stuck in the Persian Gulf.
The global shipping trade group BIMCO cautioned that the statements from the U.S. and Iran regarding the deal are unclear and don’t provide sufficient information on timing and safe routes through Hormuz.
“Due to lack of details and a history of overly optimistic reassurances, we believe the security situation for the shipping industry remains volatile, and we still consider it very risky for ships to commence transits at this point,” said Jakob Larsen, the chief safety and security officer at BIMCO.
The threat of mines in Hormuz remains a major convern, Larsen said. Secretary of State Marco Rubio told Congress earlier this month that Iran had mined large segments of Hormuz.
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