Oman presents Gulf-backed plan to Iran on voluntary Strait of Hormuz fees

Oman has presented Iran with a Gulf-backed proposal to manage the Strait of Hormuz, including a system of voluntary fees for ships using the strategic waterway, according to a Gulf source and a Western diplomat familiar with the discussions.

The proposal is aimed at helping restore stability to trade through the strait following disruptions caused by the U.S.-Israeli war on Iran.

President Donald Trump, who halted a renewed U.S. bombing campaign over the weekend, said talks with Iran were progressing but warned that military strikes could resume if negotiations fail. Iran has denied seeking to restart talks with Washington.

The United States launched its latest bombing campaign earlier this month in an effort to end Iran’s control over the strait, through which about one-fifth of the world’s oil and liquefied natural gas passed before the conflict.

Iran effectively closed the strait to foreign shipping after the United States and Israel attacked on February 28. Although a June agreement between Washington and Tehran partially reopened the waterway, the arrangement collapsed in early July after Iran fired on ships using a navigation channel it does not recognize.

Iran has proposed jointly managing the strait with Oman, which controls the opposite shore, while charging ships service fees. The United States opposes mandatory fees, insisting vessels should continue to enjoy free passage as they did before the conflict.

Under Oman’s proposal, Iran would not have sole control of the waterway, and any payments by ships would be voluntary, the sources said.

The arrangement would resemble the system used in the Strait of Malacca, where Indonesia, Malaysia and Singapore invite ships to make voluntary contributions to support navigation, environmental protection and search-and-rescue services.

The Western diplomat compared the proposal to voluntary carbon offset payments offered to airline passengers.

According to the Gulf source, Iran had not formally responded to the proposal as of Monday evening, although Omani officials met Iranian counterparts in Tehran over the weekend.

Iranian Foreign Minister Abbas Araqchi discussed the Strait of Hormuz with his Omani and Saudi counterparts on Monday, stressing the need for regional cooperation, according to Iran’s Foreign Ministry.

Trump warns of renewed strikes

Trump ended the latest U.S. air campaign after military commanders advised that the operation had achieved its objectives. The 13-day bombing campaign reportedly killed dozens in Iran and destroyed bridges, tunnels and military targets.

Iran responded with attacks on U.S. military bases in neighboring countries, killing four American service members, and strikes on civilian infrastructure in Gulf states, which Tehran said were retaliation for attacks on civilian targets.

Iran has said it will maintain the ceasefire as long as the United States does the same. However, drone attacks were reported on Monday in Jordan, Saudi Arabia and northern Iran, while Jordan said it intercepted another drone on Tuesday.

Speaking on Monday, Trump expressed optimism about reaching an agreement to end the five-month conflict but warned that military action could resume if diplomacy fails.

“I think there’s a good chance that something could happen, and if it does, good; if it doesn’t, we go back to doing what we were doing two days ago,” he said.

Iran maintains it has not sought new negotiations with Washington, accusing the United States of violating the agreement reached last month on a framework for talks aimed at ending the conflict.

Trump is scheduled to meet Israeli Prime Minister Benjamin Netanyahu in Washington on Tuesday. Although Israel participated in the initial bombing campaign, it has not taken part in the latest peace talks, and relations between the two leaders have recently become strained.

Oil prices fell sharply after Trump halted the bombing campaign, with Brent crude dropping more than 2.5% to about $86 a barrel on Tuesday after an 8% decline the previous day.

Washington and Tehran agreed in June on a framework for negotiations expected to conclude by the end of August, but both sides continue to disagree over the interpretation of provisions concerning navigation through the Strait of Hormuz.

Credit: Reuters