Iran and Oman swap proposals to manage Strait of Hormuz: What we know

The Contested Waterway's Importance

The Strait of Hormuz serves as a choke point for approximately one-fifth of the world's oil and liquefied natural gas (LNG) supplies, making its management a matter of global economic and strategic importance. Its closure earlier in the year, following US-Israeli attacks on Iran and retaliatory Iranian strikes, triggered significant global supply challenges. The recent memorandum of understanding between Iran and the US aimed to reopen the strait, but its vague wording has fueled the current disagreements over ultimate control and operational specifics.

This critical maritime passage, which lies within the territorial waters of both Iran and Oman, has historically been a flashpoint in regional tensions. The current diplomatic efforts are an attempt to establish a stable framework for its operation, preventing future disruptions that could have far-reaching consequences for international trade and energy security. The stakes are high, as any failure to reach a consensus could reignite hostilities or lead to prolonged uncertainty in a region already prone to instability.

Divergent Proposals for Control

Oman's proposal, revealed by Iran's Deputy Foreign Minister Kazem Gharibabadi, suggested a joint regional mechanism for the strait, envisioning a 50-50 split of control. This model would see Iran managing transit lanes on its side and Oman controlling those along its coast, with ships potentially entering through Iranian waters and exiting via Omani territory. The Omani plan also included a system of "voluntary fees" from shipping vessels, drawing parallels to the agreement governing the Strait of Malacca, where Indonesia, Malaysia, and Singapore collect contributions for navigation and environmental protection.

However, Iran rejected this proposal, citing national security concerns and a desire for greater oversight. Tehran's counter-proposal asserts that one route should lie entirely within Iranian territorial waters, with a portion of the other route also passing through its jurisdiction, allowing Iran to effectively monitor both inbound and outbound traffic. Iran has also warned that the strait would remain closed if its plan is rejected and that pre-war arrangements, which allowed ships to pass without tolls, are no longer acceptable, indicating a clear intent to levy charges for passage.

Sticking Points and Future Prospects

Beyond the fundamental issue of control, several other points of contention are being debated. These include the precise direction and trajectory of passing ships within the lanes, the structure and amount of fees to be collected, the authority responsible for defining any agreed arrangements, and crucial mine clearance operations within the strait. While the US has accused Tehran of placing mines, Iran has not confirmed this, though the Islamic Revolutionary Guard Corps did issue a map in April outlining a permitted route to avoid potential mines, which took ships closer to the Iranian coast.

The financial aspect, particularly Iran's desire to tax ships versus Oman's suggestion of voluntary contributions, remains a significant hurdle. The Strait of Malacca model, which Oman's proposal referenced, reportedly raises around $70 million annually, a figure that may not align with Iran's revenue expectations. Al Jazeera's reporting from Tehran suggests that Oman is now considering a third proposal, potentially involving three routes—one through Iranian waters, an international lane, and one through Omani waters—with Iran reportedly showing some flexibility. The outcome of these complex negotiations will determine the future stability and accessibility of this globally vital maritime artery.