Iran and Oman swap proposals to manage Strait of Hormuz: What we know

by | Jul 29, 2026 | World

Iran and Oman swap proposals to manage Strait of Hormuz: What we know

Iran and Oman are engaged in diplomatic negotiations over control of the Strait of Hormuz, a critical waterway through which approximately one-fifth of global oil and liquefied natural gas supplies pass. The talks follow a June 17 memorandum of understanding between Iran and the United States intended to reopen the strait to shipping for at least 60 days without charge. However, ambiguous language in the agreement has led to disputes over authority and routing protocols, and fighting between the US and Iran resumed before being halted at the end of last week.

Oman initially proposed a joint regional mechanism dividing control of the strait equally between the two countries. Under this plan, Iran would oversee transit lanes within its territorial waters while Oman would manage lanes along its coast, with ships potentially entering Iranian waters and exiting through Omani territory. The proposal also included voluntary fees from shipping vessels to support both nations. This arrangement appears modeled after the Strait of Malacca agreement, in which Indonesia, Malaysia, and Singapore collect voluntary contributions for navigation assistance and environmental protection.

Iran’s Deputy Foreign Minister Kazem Gharibabadi stated that the Omani proposal inadequately addressed Tehran’s security concerns and announced Iran’s alternative plan on Tuesday. Iran’s counterproposal would establish one route entirely within Iranian territorial waters and position the second route so that Iran can oversee both inbound and outbound traffic. Gharibabadi warned that the strait would remain closed if Oman rejects this arrangement and stated that pre-war shipping conditions without tolls would not be restored.

Oman is reportedly considering a third option involving three maritime routes: one through Iranian waters, an international lane, and a third through Omani waters. Oman’s approach has backing from regional governments, with Gulf Cooperation Council foreign ministers meeting to discuss regional security. Reports indicate Iran may be showing flexibility regarding this alternative proposal.

Disputes extend beyond routing to questions of fees, mine clearance operations, directional requirements, and governance of any final agreement. Iran has proposed a service fee of approximately $1 million per ship, substantially higher than the roughly $70 million annually generated through the voluntary system in the Strait of Malacca. Iran has indicated that shipping fees would support reconstruction efforts following infrastructure damage from recent attacks.

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