Iran Update Special Report, August 5, 2026

Key Points:

• Iran’s internal factional divisions, particularly between the IRGC-led anti-concessions group and the pro-concessions faction, are delaying approval of the draft Iran-Oman agreement on vessel traffic in the Strait of Hormuz, with conflicting reports about its finalization.
• The emerging Iran-Oman arrangement would increase Iran’s control over maritime traffic in the strait, allowing inbound vessels to travel through Iranian waters and giving Iran a role in outbound traffic, potentially replacing existing routes and enhancing Tehran’s ability to monitor and pressure vessels.
• Iran is conditioning the reopening of the strait on significant US concessions, including ending attacks on Iran, addressing alleged violations of a Memorandum of Understanding, and providing military guarantees, viewing the strait agreement as part of a broader negotiation framework.
• In Iraq, Prime Minister Ali al Zaydi’s anti-corruption and militia disarmament efforts are causing fractures within the Shia Coordination Framework, with some leaders withdrawing support due to fears of investigations and refusing to arrest senior Iranian-backed militia figures.
• Iraqi Foreign Minister Fuad Hussein discussed reviving plans for a Basra-Aqaba oil pipeline with Jordanian and Egyptian counterparts, reflecting regional efforts to develop alternative export routes that bypass the Strait of Hormuz amid Iran’s increasing control of maritime traffic.