Oman has reportedly devised a plan, endorsed by other Persian Gulf states, to “manage” traffic through the Strait of Hormuz in partnership with Iran — and for both nations to collect “voluntary fees” from ships that use the vital waterway.
Of course, Iran has demonstrated its willingness to launch murderous attacks against civilian vessels in the strait to enforce its will, so it is highly dubious that any “fees” extracted from shipping companies would be truly “voluntary.”
Iran has long pushed for itself and Oman, the country on the other side of the strait, to control access and extort fees from the billions of dollars in oil shipments that flow through it. In June, Iran and Oman formed a joint “Strait of Hormuz Committee” to discuss plans for extracting revenue from the formerly free international waterway.
The Omanis irked Tehran by allowing ships to sail through their territorial waters at a time Iran insisted the Strait of Hormuz was “closed.” The Iranians have attacked civilian ships, and murdered civilian crew members, for daring to use the route through Oman’s waters.
One of the lingering questions of the Iran conflict was whether Oman would agree to Iran’s proposals for organized piracy or would continue making its own arrangements with oil-producing nations like Bahrain to provide safe passage.
According to Reuters, that question was answered on Tuesday, as a “Gulf source and a Western diplomat” said Oman has presented Iran with a proposal for mutual control of the Strait of Hormuz.
“Under the Omani proposal, Iran would not exercise sole control and fees would be voluntary,” Reuters’ sources said. “The system would be analogous to one in place on Asia’s Strait of Malacca, where Indonesia, Malaysia and Singapore ask ships to pay voluntary contributions to fund navigation, environmental protection and search-and-rescue operations.”
Two men wade in the waters of the Strait of Hormuz with vessels anchored in the background, off Bandar Abbas, Iran, Sunday, July 12, 2026. (Razieh Poudat/ISNA via AP)
The Western diplomat compared Oman’s proposal to collecting carbon taxes, which are similar in the sense that they extract money for very dubious “services,” but very different because they are not collected by homicidal terrorists with arsenals of killer drones and ballistic missiles.
Based on these limited details, it would appear Oman tried to craft a proposal that would slake Iran’s thirst for money and conquest without making the fees so onerous, or humiliating, that other Gulf states would fight against paying them.
The foreign ministers of the Gulf Cooperation Council (GCC), which includes Oman, held a video conference to discuss “ways to intensify cooperation on issues related to freedom and safety of vessels through the waterway,” as the Qatari foreign ministry put it. The ministers implicitly did not reject Oman’s proposal for Strait of Hormuz fees, although it was not officially included in the summary of their meeting.
CNBC reported on Tuesday that Iranian Foreign Minister Abbas Araghchi held telephone conversations with the foreign ministers of Oman and Saudi Arabia to discuss the Strait of Hormuz situation, among other “bilateral and regional developments.”
The Iranian Foreign Ministry said the calls concerned “joint diplomatic efforts to establish stability in the region and eliminate the insecurity imposed on the Strait of Hormuz caused by the aggressive actions of the United States.”
Oman reportedly presented its proposal for Strait of Hormuz fees to Iran during their phone call, and the Iranians evidently did not reject the proposal out of hand.
So many reports on the Strait of Hormuz this week are buzzing with comparisons to the Strait of Malacca that it seems likely the Omanis made the comparison in their proposal or have pushed the idea to international media.
In reality, analysts are growing nervous that Iran’s blockade of Hormuz could lead one or more of the countries bordering on Malacca to begin extorting money from the shipping industry.
The Strait of Malacca would be very easy to blockade, as it is less than two miles wide at its narrowest point. Some 30 percent of global shipping, and 50 percent of seaborne oil, currently flows through the strait, which passes between Indonesia, Malaysia, and Singapore.
As with the Strait of Hormuz, bypassing the Strait of Malacca by sailing around Australia would add weeks to shipping times, with massive added costs.
The country most vulnerable to a blockade crisis in the Strait of Malacca would be China, which gets 80 percent of its seaborne oil through the passage. China has long been nervous about putting so much of its oil flow at risk, so it has invested heavily in preparing alternate routes and pipelines, as many Persian Gulf states are currently scrambling to bypass the Strait of Hormuz.
The Strait of Malacca is jointly administered by the three adjoining states, but they do not extract tolls or levies from shipping, and they are very careful to avoid implying that the strait could ever be blockaded. An Indonesian official floated the idea of imposing levies in April, but Singapore and Malaysia quickly shut it down.
All three nations offer legitimate services to mariners, such as towboats, harbor pilots, and navigational aids, particularly for getting through the narrowest part of the very long strait. There have been collisions and spills in the past, so safety is a real concern.
No one has ever needed such services in the Strait of Hormuz.
A system for shipping nations to make truly voluntary contributions to maintaining the Strait of Malacca was created in 2007, but the amount of money it collects is a pittance – just $23 million during its first 15 years of existence – and the funds are spent on safety equipment, such as buoys and electronic navigational aids. The terror masters of Iran are unlikely to settle for pocket-change contributions to a carefully-managed international fund.
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