Iran and Oman Propose Transit Tolls for Strait of Hormuz

The Government of Iran and the Government of Oman have proposed a joint administration of the Strait of Hormuz that would include the collection of administrative transit fees from commercial vessels. This proposal comes as the United States and Iran operate under a 60-day memorandum of understanding ensuring free navigation in the waterway.

Tehran has simultaneously urged the International Maritime Organization to reject a separate proposal from the United Arab Emirates and eight allies, calling the UAE's submission politically motivated and legally unfounded. Iran asserts it does not recognize the transit passage regime under the UN Convention on the Law of the Sea, instead applying the principle of innocent passage. While stating its measures do not amount to closing the strait, Iran requested the IMO refrain from ruling on the waterway's legal status without coastal state agreement.

Market analysts warn that permanent tolls in the corridor, which handles roughly 20% of global traded oil, could serve as a more potent economic weapon than military escalation by increasing freight and insurance costs. These fears extended to the Strait of Malacca, prompting Indonesian President Prabowo Subianto and Singaporean Prime Minister Lawrence Wong to meet in Jakarta on July 7 to reaffirm their commitment to unimpeded passage through that corridor.