DUBAI — Iran has rejected an offer from Oman to jointly oversee the strategic Strait of Hormuz, making its own proposal instead as both sides continue to mull over what a final deal might look like.
Oman, which sits across the strait from Iran, has proposed a tentative plan to establish equal lanes of control, but Tehran on Tuesday demanded that Oman take over most of the waterway, which is critical to the flow of global oil supplies, one of the country’s top diplomats said.
Iran’s Deputy Foreign Minister Kazem Ghalibabadi said on state television on Tuesday that Oman’s proposal does not adequately address Iran’s concerns about control of the strait.
Iran’s move jeopardized hopes that Iran and the United States would quickly resume negotiations to end the war. The narrow strait has been at the center of the U.S.-Iranian conflict since late February, when the U.S. and Israeli attacks on Iran began.
Before the war, about one-fifth of the world’s oil and liquefied natural gas (LNG) supplies were shipped via this route from Gulf producers. Shortly after the war began, Iran closed the strait, creating global supply problems. The United States then imposed its own blockade of Iranian ports.
Iran says it wants to control the strait along with Oman, which controls the strait, and to charge ships using the strait a service fee. The U.S. government wants a return to the pre-war status quo, when ships could sail freely without payment, and argues that mandatory tolls would be illegal.
U.S. officials on Tuesday again rejected the idea of imposing tolls or fees on ships passing through the strait, reiterating that the strait is an international waterway that should be controlled and restricted by Iran. The official told Reuters the deal being discussed does not include tolls or fees.
Under Oman’s proposal, Iran would not exercise sole control and the fees would be voluntary, Gulf sources and Western diplomats briefed on the matter told Reuters.
Gharibabadi revealed that Muscat is proposing a joint regional mechanism under which both countries would manage the strait on a 50-50 basis. Under the proposal, Iran would control the traffic lanes on the Strait side, and Oman would control the lanes along the coast.
“Oman has proposed to us the creation of a shipping route in the Strait of Hormuz, with 50% of the shipping route located within our territorial waters and the remaining 50% within Omani territorial waters. The route for vessels to pass through the Strait of Hormuz could include entering from our waters and exiting through Oman’s territorial waters,” Gharibabadi told state television.
Additionally, the proposal proposed “voluntary charges” from transport vessels bound for the two countries.
The scheme is similar to one in place in Asia’s Straits of Malacca, where Indonesia, Malaysia and Singapore require ships to pay voluntary contributions to fund navigation, environmental protection and search and rescue operations.
Western diplomats likened it to a voluntary carbon tax on flights, where ticket buyers could choose whether they wanted to pay to offset emissions.
Oman’s proposal appears to have support from regional countries as well. Gulf Cooperation Council foreign ministers met via video call on Tuesday to discuss the latest developments in the conflict, including ways to strengthen cooperation on issues related to the freedom and safety of ships passing through the waterway, according to a statement from Qatar’s Ministry of Foreign Affairs.
But Gharibabadi said Iran ultimately rejected the proposal, citing national security concerns.
He said Iran had proposed to Oman that Iran control one-way shipping through its side of the strait, while Muscat control some, but not all, of the other direction.
“Our proposal is that one route would be entirely within the territorial waters of the Islamic Republic of Iran, and part of the other route would also pass through Iranian territorial waters, allowing Iran to effectively supervise both inbound and outbound traffic,” Gharibabadi said.
Gharibabadi warned that if Oman rejects the plan, the strait will remain closed. He also warned that the Strait of Hormuz cannot return to pre-war arrangements if ships pass through without paying tolls.
According to state media, Iran’s Joint Forces Command has again rejected President Trump’s proposal to seek compensation for damages to ships from frozen Iranian assets. It said countries and companies that accepted such payments would be denied passage through the Strait of Hormuz by Iranian forces.
Adding to shipping challenges in the region, Yemen’s Iranian-allied Houthis on July 20 declared a blockade of Saudi ports in the Red Sea, opening a new front against the United States and its allies.
