Skip to content
You can now search across every topic, entity and event.What's new
Iran Conflict 2026
20JUL

Oman's Hormuz fee splits its authors

3 min read
10:51UTC

Oman handed the US a plan to charge "service fees" for Strait of Hormuz passage; Iran's Gharibabadi calls the same charges compulsory, and the White House says Iran cannot toll an international waterway.

ConflictDeveloping
Key takeaway

Oman and Iran describe one Hormuz fee in opposite terms, with the toll-free window expiring in August.

Oman handed the United States and its allies a written proposal for running the Strait of Hormuz on 30 June, according to a regional diplomat and a US source 1. The plan would let shipping companies pay "service fees", explicitly not tolls, modelled on the voluntary contributions vessels make in the Malacca and Singapore Straits 2. Hormuz carries roughly a fifth of the world's seaborne oil, so who charges for passage and on what basis is a question with global freight costs attached. The proposal is not finalised, and US negotiators have concerns they mean to raise with Muscat 3.

Three parties now describe one waterway in three ways. Oman calls the charges voluntary; Iran's deputy foreign minister Kazem Gharibabadi calls them compulsory and warns of unilateral action if the talks fail 4. Washington rejects both readings: White House spokeswoman Anna Kelly said "Iran cannot toll the strait, which is an international waterway" 5, restating the zero-fees line Marco Rubio and the Gulf states set out in Manama days earlier .

The Islamabad memorandum of 16 June set 60 days of toll-free passage, and Oman's fees would take over once that window and the US oil licence, General License X, both lapse in the third week of August . Tehran says it is covering the cost of the current free window from its own treasury, though Middle East Eye's reading of the memorandum text finds it names no cost-bearer, only Iran's "best efforts" 67.

The Malacca and Singapore model Oman copied runs on voluntary user contributions administered by a private Japanese foundation, with no power to compel a ship to pay. Grafting that onto a strait where a co-signatory calls the fee mandatory imports the ambiguity rather than settling it. Abbas Araghchi's claim of Iran's "sole" oversight was always rhetoric: the same memorandum gave Oman an equal seat and a joint fee committee , and its two authors now cannot agree what their own instrument means.

Deep Analysis

In plain English

The Strait of Hormuz is the narrow sea passage between Iran and Oman that roughly a fifth of the world's oil moves through. Oman has proposed that shipping companies using the strait pay a voluntary fee, similar to how ships already pay towards patrol costs in the Malacca Strait between Malaysia, Indonesia and Singapore. Iran says the same fee should be compulsory, and its deputy foreign minister has warned Iran could act on its own if it isn't. The White House says no country can charge ships just for passing through an international waterway. The dispute is really about who has the authority to charge for using the strait at all, and neither side has published an actual price.

Deep Analysis
Root Causes

Muscat ratified UNCLOS in 1989, and Article 26 of that treaty bars any charge on foreign ships for the mere act of passage through a strait. Oman's 'voluntary contribution' label keeps its proposal inside the treaty Muscat is bound by, rather than the mandatory toll Article 26 would forbid.

Iran signed UNCLOS in 1982 but never ratified it, so the same prohibition does not bind Tehran. That is why Iran's deputy foreign minister can call an identical fee 'compulsory' without contradicting any treaty obligation of his own government.

Escalation

Iran's 'unilateral action' warning follows a pattern the topic has already established. Verbal threats over the Hormuz corridor preceded the actual IRGC strikes on the Ever Lovely and Kiku , both hit within 48-72 hours of a warning about the same southern lane . On that base rate this is not an idle threat, though the target this time is a fee dispute rather than a routing dispute.

What could happen next?
  • Risk

    Iran's threat of unilateral action over the fee dispute follows the same warning-then-strike pattern seen with the Ever Lovely and Kiku attacks, raising the chance of a fresh IRGC move against shipping within days rather than weeks.

  • Precedent

    If shippers adopt Oman's voluntary model while ignoring Iran's compulsory version, Hormuz ends up running two competing fee regimes on one waterway, an outcome with no clean precedent at any other strait.

First Reported In

Update #142 · Doha: three stories, no signed paper

CNN· 1 Jul 2026
Read original
Different Perspectives
Jordan
Jordan
Jordan's armed forces downed three Iranian missiles on Tuesday with no casualties, a second successful interception since the 19 July strike on Muwaffaq Salti that killed three US service members. Amman has neither confirmed nor denied ISW's assessment that its intelligence sharing is a Russia-China cover story.
Operation Aspides
Operation Aspides
Operation Aspides has not needed to intervene against the Houthi Bab al-Mandab embargo: six vessels, including the Chinese VLCC Xin Long Yang, reversed course after radio hailing alone, with no vessel boarded, fired on or stopped by force.
Pete Hegseth, US Secretary of War
Pete Hegseth, US Secretary of War
Hegseth told the Senate Appropriations Committee the campaign has cost $37.5 billion so far, without saying whether the figure is obligated, appropriated or incremental. It is the first cost Washington has put on the war, arriving as OMB seeks $87.6 billion for the wider supplemental.
Iran's IRGC and Artesh
Iran's IRGC and Artesh
Iran's IRGC and Artesh reported destroying radar and Patriot installations at four Gulf bases on Tuesday night, the fifth dated iteration of the same claim against the same sites since 13 July. Neither Kuwait nor Bahrain has named or confirmed a single base as destroyed.
Saudi Arabia
Saudi Arabia
Riyadh has pressed Washington to end the Hormuz blockade specifically to remove Tehran's incentive for the Houthis to escalate Bab al-Mandab beyond radio warnings. It treats the embargo as coordinated pressure on Saudi shipping tied to the Hormuz campaign, not an independent Yemeni action.
Kuwait's Ministry of Electricity, Water and Renewable Energy and defence ministry
Kuwait's Ministry of Electricity, Water and Renewable Energy and defence ministry
Kuwait reported power and desalination stations struck for a fourth consecutive day and four cruise missiles plus 21 drones intercepted since dawn Wednesday, while its defence ministry statement used only the word interception, never destruction. Kuwait has confirmed no Iranian claim of a destroyed base.