Oman has presented Iran with a Gulf-backed proposal to manage the Strait of Hormuz by collecting voluntary service fees from passing commercial vessels, according to a Gulf source and a Western diplomat who spoke to Reuters on Tuesday. The diplomatic push aims to resolve trade disruptions caused by the ongoing U.S.-Israeli conflict with Iran, which previously shut down the vital waterway to international shipping.
Strait of Hormuz Voluntary Fees Proposal
Under the Omani framework, Iran would avoid exercising sole control over the maritime corridor. Instead, the mechanism mirrors Asia’s Strait of Malacca, where Indonesia, Malaysia, and Singapore collect voluntary financial contributions from ships to fund navigation, environmental protection, and search-and-rescue operations. A Western diplomat compared the system to a voluntary carbon tax for commercial flights, allowing operators to choose whether to offset their operational impact. A senior Iranian source told Reuters that Tehran has not yet responded to the plan.
Did you know? Before the conflict, approximately one-fifth of global oil and liquefied natural gas flowed through the Strait of Hormuz. Washington maintains that charging mandatory transit fees is illegal and insists on returning to the pre-war status quo of completely free passage.
Trump Warnings and Military Strikes
President Donald Trump warned during a Fox News interview on Tuesday that U.S. military strikes would resume if ongoing negotiations fail to produce a deal. Trump abruptly called off a two-week U.S. bombing campaign over the weekend following advice from military commanders that the strategy had run its course. The 13 nights of renewed aerial bombardments killed scores in Iran and destroyed critical infrastructure, including bridges and tunnels across the south, alongside military targets. In retaliation, Iranian strikes on U.S. bases in neighboring countries killed four service members.
Despite the halt in U.S. airstrikes, drone attacks were reported in Jordan, Saudi Arabia, and northern Iran on Monday, with Jordan confirming another drone downing on Tuesday. Trump reiterated his readiness to target Iran’s deeply buried Pickaxe Mountain nuclear facility if diplomacy collapses.
Oil Market Impact and Regional Diplomacy
Global energy markets reacted swiftly to the de-escalation in military activity. The end of the U.S. bombing campaign sent oil prices tumbling by around 8% on Monday, and the downward trend persisted on Tuesday. Brent crude futures were down around 1.6% at close to $87 a barrel by mid-morning. Meanwhile, Gulf Cooperation Council foreign ministers convened via a video call on Tuesday to discuss regional developments, focusing on ways to enhance safety and freedom of navigation through the waterway, according to a Qatari Foreign Ministry statement.
Frequently Asked Questions
Why did Iran close the Strait of Hormuz?
Iran effectively closed the strait to non-Iranian ships after the United States and Israel launched attacks on February 28.
What is Oman’s role in the current negotiations?
Oman has put forward a plan backed by Gulf states to manage the strait through voluntary service fees, preventing sole Iranian control and helping restart commercial traffic.
How have oil prices responded to recent events?
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