Oman Shifts Toward Joint 'Service Fee' Collection with Iran in Strait of Hormuz Despite U.S. Opposition

Oman is reportedly moving forward with a plan to collect a service fee from vessels passing through the Strait of Hormuz in partnership with Iran, despite public opposition from the United States.

Oman, which had previously maintained a cautious stance regarding the imposition of transit fees in the Strait of Hormuz, now appears to be moving toward formalizing a so-called joint management plan proposed by Iran, even in the face of U.S. disapproval.

On June 30 (local time), The New York Times (NYT) reported, citing multiple diplomatic sources and Iranian officials, that Oman recently delivered an official proposal to the U.S. and Western nations outlining a plan for vessels using the Strait of Hormuz to pay a service fee.

Oman has described this as a voluntary service fee rather than a mandatory transit toll.

The initiative is reportedly modeled after the navigational safety fund currently operating in the Strait of Malacca and the Singapore Strait.

In those straits, a private foundation collects voluntary contributions to ensure safe navigation.

Omani Foreign Minister Badr Albusaidi emphasized in an interview with an Arabic radio station on June 28 that maintaining the waters safely and free of pollution, as well as responding to periodic emergencies, "undoubtedly costs money."

He noted that "lessons can be learned from existing examples," referring to the case of the Strait of Malacca and the Singapore Strait.

Oman had previously maintained the position that simply imposing a transit toll on vessels passing through the strait was not permitted under international law.

However, the country has also argued that the costs of navigational safety and maritime services provided by coastal states are a separate matter.

Iran, on the other hand, maintains that the service fee should be mandatory.

Mehdi Mohammadi, an advisor to Iran's chief negotiator with the U.S., recently stated on social media, "Whether it is a transit toll, a security service fee, or a maritime passage fee, the terminology does not matter to Iran," adding, "There is no such thing as a free service anywhere in the world."

Kazem Gharibabadi, Iran's Deputy Foreign Minister, also stated on state television the previous day that while reaching an agreement with Oman is the top priority, Iran would pursue the plan independently if Oman does not agree to establish a joint management system.

The United States has strongly opposed any form of monetization of the Strait of Hormuz, regardless of the terminology used.

When reports emerged in May that Oman had discussed cooperation with Iran on imposing transit fees, U.S. President Donald Trump threatened that he would "bomb" them if Oman imposed such tolls.

U.S. Secretary of State Marco Rubio also emphasized in Bahrain last week, "We oppose any plan that links the use of the strait to money, whether it is a fee, a toll, or a contribution," adding, "We must return to free navigation as it was before the dispute."

The U.S. negotiating team has reportedly received Oman's proposal and plans to discuss its concerns with the Omani government.

However, the NYT reported that the U.S. government expects to be able to resolve differences through working-level consultations, given the strategic cooperative relationship with Oman.

According to the memorandum of understanding (MOU) signed by the U.S. and Iran this month, the safe and free passage of merchant vessels through the Strait of Hormuz is guaranteed for the 60-day duration of the negotiations.

However, it was agreed that the operational plan thereafter would be established through consultations between Iran and Oman.

Deputy Minister Gharibabadi stated that he plans to discuss the operation of the strait with Oman starting next week, and that the agenda will include the collection of service fees from passing vessels and the issue of changing existing shipping routes.

While European nations are reportedly negative toward the service fee proposal, they are said to be focused on ensuring the system is operated in a way that does not violate international law, rather than attempting to block it in practice.

Arsenio Dominguez, Secretary-General of the International Maritime Organization (IMO), who previously held the position that systems restricting freedom of navigation in international waterways, such as transit tolls, were inconsistent with international law, showed a more flexible attitude a few days ago by suggesting that the creation of a voluntary fund for the Strait of Hormuz could be possible.

However, concerns have been raised that Oman's service fee proposal could trigger backlash from other Gulf Arab nations that export crude oil and natural gas through the Strait of Hormuz.

As the Strait of Hormuz is a vital chokepoint for global oil and natural gas transport, the introduction of a new cost structure is expected to have a significant impact on the interests of energy exporters in the region.

(Photo: AP, Yonhap News)
※ Please note: This article was translated by AI and may contain errors.