Iran and Oman have jointly proposed a system for managing the Strait of Hormuz that would allow the two nations to collect administrative fees from passing vessels, according to four sources briefed on the plan. The proposal has already been delivered to U.S. officials, though the scope of formal discussions remains unclear.
The initiative stems from a memorandum of understanding signed last month between the U.S. and Iran establishing a 60-day window for ships to transit the strait freely. After that period, Iran and Oman were tasked with consulting other Persian Gulf states about administering the critical waterway, which annually handles about 20% of the world's oil and liquefied natural gas supply.
Oman's Foreign Minister Sayyid Badr bin Hamad Al Busaidi said this week that his government opposes mandatory tolls on shipping. However, he drew a distinction between compulsory fees and voluntary charges that shipping companies could pay to support maintenance of the vital passage. He cited precedents in the Strait of Malacca and Singapore, where similar models exist.
A Middle East official told reporters that Iran is pushing hard for the fee structure and believes the U.S. will eventually accept some version of it. The official said revenues would be collected through consultation with the international community and the International Maritime Organization, with funds potentially shared between Iran and Oman for purposes like environmental assessment, rescue operations, and navigational support.
The Trump administration has flatly rejected the concept. White House spokesperson Anna Kelly issued a statement saying, "President Trump has been clear that Iran cannot toll the Strait, which is an international waterway." Secretary of State Marco Rubio reinforced the position during a recent Middle East visit, telling reporters that no country is permitted to charge tolls on international waterways under existing law.
U.S. negotiators have expressed concerns about the proposal but indicated they plan to address it directly with Oman. One source familiar with the discussions said American officials believe the disagreement can be resolved at a technical level and that the administration values its partnership with Oman. The source also noted that the current proposal does not contain mandatory tolls and that Oman has consistently affirmed its commitment to allowing shipping traffic to pass without charges.
The proposal represents a stark departure from conditions before recent regional tensions, when commercial vessels routinely transited the strait without any fees or administrative charges. An Iranian official argued that Oman has historically spent money maintaining maritime, environmental, and navigational services in the strait without collecting compensation, suggesting the timing may now be appropriate to introduce charges.
Author Sarah Mitchell: "This proposal reveals the fundamental gap between Iran's long-term strategy for the strait and Washington's non-negotiable red line, and resolving it will require Oman to choose between two powerful interests."
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