Key Takeaways:
Oman's foreign minister said future arrangements for the Strait of Hormuz will not include transit tolls, diverging from Iran's push to charge fees on vessels passing through the waterway.
Oman's top diplomat ruled out transit tolls for the Strait of Hormuz on Wednesday, breaking with Iran's push to charge fees on vessels passing through the waterway that handles about a fifth of the world's oil supply.
"Future arrangements concerning the Strait of Hormuz do not involve collecting any transit tolls or fees," Omani Foreign Minister Badr al-Busaidi said, according to a statement on June 25.
The comments came two days after Oman and Iran agreed in a joint statement to pursue talks on the future administration of navigation in the strait, including maritime services and associated costs. The two countries asserted "their sovereignty and sovereign rights over their territorial waters" and said a joint working group between their foreign ministries would be formed to continue discussions with other littoral states.
The Strait of Hormuz is the world's most important oil chokepoint, with about 17 million barrels per day — roughly 20% of global consumption — passing through its narrow waters. Since the start of the US-Israeli war with Iran in February, the waterway has been largely closed to commercial shipping, with Iran effectively blocking the strait and the US blockading Iranian ports in response. WTI crude has traded with a persistent geopolitical risk premium, reflecting the potential for supply disruptions through the chokepoint.
Iran's Persian Gulf Strait Authority has published "Passage Rules and Regulations" that ship owners are expected to agree to before being given permission to cross, according to a document viewed by the Jerusalem Post. The regulations state that Iran "reserves the right to enforce penalties, revoke permissions or take further legal action" and that the "PGSA reserves the right to introduce insurance fees in the future." The authority has also said it would prohibit ships with ties to Israel.
The push for fees faces significant legal hurdles. Under Articles 38 and 44 of the United Nations Convention on the Law of the Sea, bordering states cannot suspend, impede, or charge tolls for vessels passing through the strait, though countries may charge fees for services provided. Iran is not a signatory to UNCLOS, but the convention's right of transit passage is widely regarded as customary international law binding on all states.
Legal and Operational Risks
Emma Salisbury, a senior fellow at the Foreign Policy Research Institute's National Security Program and an associate fellow at the Royal Navy Strategic Studies Centre, said any arrangement imposing conditions, fees, or selective access requirements on shipping "would face a serious legal challenge."
"As the two coastal states bordering the Strait of Hormuz, Iran and Oman do have a recognized role in managing navigation services, but the strait is subject to right of passage under UNCLOS and under customary international law binding on all states," Salisbury said.
She warned that embedding Iran's positional awareness within a governance framework rather than exercising it through coercion "would make it far harder to contest legally or diplomatically, and would also complicate US naval operations in a conflict scenario by blurring the line between civilian maritime administration and military-intelligence activity."
US President Donald Trump said on Wednesday that Iran had informed the US that "no tolls, no insurance costs, and no other charges of any kind" were being sought, warning that "if this is false information, negotiations would end, immediately."
Oman's Balancing Act
Oman's involvement could prove stabilizing for a region that has feared Iran would close the strait as a pressure tactic. "Oman has a material and strategic interest in keeping the strait open, it has historically maintained working relationships with both Iran and Western powers, and its participation creates at least some external constraint on Iran's freedom of maneuver," Salisbury said.
However, she cautioned that "Oman cannot compel Iranian behavior, and Tehran will retain the physical and military capacity to close or coerce the strait regardless of any administrative arrangement."
The divergence between Oman's no-toll stance and Iran's published regulations suggests the joint working group faces significant obstacles before reaching any agreement on the strait's future governance. The next round of talks has not yet been scheduled.
This article is for informational purposes only and does not constitute investment advice.
