The Iran war has now placed the primary spotlight on energy markets—and for good reason. Last week alone, at least six tanker or bulk-vessel incidents were documented by the United Kingdom Maritime Trade Operations (UKMTO). Key oil ports and storage tanks have been struck with offensive munitions, and oil production levels have been curtailed or even halted by major producers in the Gulf.

Make no mistake, this week will go down in the history books as one of the most consequential for energy markets. Even with the International Energy Agency (IEA) announcing a massive, coordinated release of up to 400 million barrels from Strategic Petroleum Reserves across member nations, concerns remain about how much oil can realistically reach the market in a timely manner, specifically the flow rate, as well as how those reserves will eventually be replenished. In many ways, the announcement has turned out to be more of a tailwind for oil prices rather than a definitive solution to reverse them.

Now, don’t get me wrong, this situation could still get significantly worse before it improves. However, a potential silver lining may be emerging: a decentralized diplomatic effort aimed at restoring limited flow through the Strait of Hormuz on a country-by-country basis.

Reuters and other media outlets have reported that officials from India have formally reached out to Iranian government officials in an attempt to secure safe passage for Indian-flagged tankers through the Strait of Hormuz. At least in one instance, that effort appears to have been successful.

The agreement specifically applies to Indian-flagged vessels, an important detail in this diplomatic “olive branch”, but it would allow the world’s third-largest oil consumer to relieve some of the pressure caused by supply disruptions. In fact, a Suezmax tanker named Shenlong was able to transit the strait and dock at the Indian port of Mumbai shortly after the news report surfaced. Notably, the vessel was carrying Saudi Arabian crude, which is significant given that Saudi Arabia itself has been targeted by the Iranian regime during the conflict.

Why is this important? Because it demonstrates that limited diplomacy may still be effective—even if only in the short term. Here’s where the story becomes even more interesting. Reports are now surfacing, originally reported by the Financial Times, that France and Italy are exploring a similar diplomatic strategy. Both countries are reportedly considering talks with Iran aimed at securing safe passage for their ships through the strait.

This effort will likely face a more difficult path, but if successful, it could provide a framework for other nations to follow. Such agreements could transform current shipping conditions, from a near stoppage of traffic outside of Iranian- and Chinese-destined vessels, into a limited trickle of international cargo flows moving through the Gulf.

While this would not completely resolve the crisis, it could reduce friction in global energy logistics, ease some of the pressure on the global economy, and could possibly be the only solution if an offramp does not present itself soon.

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