Why Iran and Oman Are Rethinking Hormuz Security

By VirentaNews Staff — May 22, 2026

Iran and Oman are advancing high-level discussions on establishing a permanent security and toll regime for commercial vessels transiting the Strait of Hormuz, one of the world’s most critical maritime chokepoints. Iran is advocating for the formalization of a transit fee, which it argues would fund regional security and environmental protection. If implemented, the move would mark a significant shift in the governance of international waters, challenging long-standing interpretations of the UN Convention on the Law of the Sea (UNCLOS). The proposal has drawn cautious scrutiny from global shipping bodies, Gulf Cooperation Council members, and Western powers concerned about precedents for tolls in strategic straits.

Strategic Chokepoint Under New Scrutiny

The Strait of Hormuz, a 21-mile-wide waterway separating Iran and Oman, handles approximately 21 million barrels of oil per day—nearly 20% of global petroleum shipments—as well as vast volumes of liquefied natural gas. According to data from the U.S. Energy Information Administration, over $1.5 trillion in trade passes through the strait annually. Iran’s proposed toll, estimated at $1 to $3 per barrel for oil tankers and scaled fees for other vessels, could generate between $700 million and $1.2 billion in annual revenue. While Oman has not disclosed its position publicly, Iranian diplomatic sources indicate Muscat is open to a bilateral framework that respects international law while enhancing joint monitoring and response capabilities. The International Maritime Bureau reports that 90% of Hormuz traffic consists of oil and gas carriers, primarily bound for Asian markets.

Key Regional and International Actors

Iran’s push is led by senior officials in the Ministry of Foreign Affairs and the Islamic Revolutionary Guard Corps Navy (IRGC-N), which has long asserted control over the northern approaches to the strait. Oman, traditionally neutral and diplomatic, has engaged through its Ministry of Heritage and Culture and naval command, emphasizing multilateral consultation. The United Arab Emirates, though not directly involved, has voiced concern, particularly given its historical disputes with Iran over islands near the strait. The U.S. Fifth Fleet, based in Bahrain, monitors the area closely and has conducted freedom of navigation operations in response to past Iranian threats. Meanwhile, China, the largest importer of Gulf oil, has urged dialogue, with Beijing positioning itself as a mediator under its Gulf Security Initiative. European nations and the International Chamber of Shipping have called for transparency and adherence to UNCLOS, which guarantees innocent passage through international straits.

Legal, Economic, and Security Trade-offs

The proposed toll system presents complex trade-offs. Proponents argue it could fund environmental safeguards, anti-piracy patrols, and navigational aids, reducing accidents in a congested waterway. Iran claims the revenue would support regional stability and maritime safety. However, critics warn it could set a dangerous precedent, encouraging other coastal states to impose fees on critical routes like the Malacca or Bab el-Mandeb straits. Legally, UNCLOS Article 45 prohibits tolls on vessels in transit passage, though Iran is not a party to the convention. Economically, even modest fees could raise shipping costs, with ripple effects on global energy prices. Insurers may reassess risk premiums if the strait is perceived as politically contested. Conversely, a jointly administered Oman-Iran mechanism could reduce tensions and enhance coordination, potentially lowering the risk of miscalculation—a factor that contributed to incidents in 2019 and 2021.

Why the Timing Has Shifted

The current momentum stems from a confluence of geopolitical and economic factors. Iran, under renewed economic pressure from U.S. sanctions and declining oil revenues, seeks alternative income streams. Meanwhile, Oman, facing fiscal constraints post-pandemic, may see value in shared stewardship. Regional de-escalation efforts, including improved Iran-Saudi ties brokered by China in 2023, have created diplomatic space for such initiatives. Additionally, global supply chain vulnerabilities exposed by the Red Sea crisis have heightened awareness of chokepoint risks. Unlike previous unilateral Iranian threats—such as temporary closure warnings in 2011 and 2019—this proposal is framed as a cooperative, rules-based system, making it harder to dismiss as mere brinkmanship. The timing also aligns with Iran’s broader strategy of asserting maritime sovereignty in the Persian Gulf.

Where We Go From Here

Three plausible scenarios could unfold in the next 6 to 12 months. First, a limited bilateral agreement between Iran and Oman could establish a voluntary fee for vessels seeking enhanced navigation support, avoiding direct conflict with international law. Second, regional backlash—led by the UAE, Saudi Arabia, and the U.S.—could stall talks, prompting Iran to unilaterally declare fees, triggering legal disputes and naval standoffs. Third, the International Maritime Organization (IMO) could be invited to mediate, leading to a multilateral framework that incorporates toll revenue into a Gulf-wide security fund. Each path carries risks: the first may normalize tolls incrementally, the second could destabilize energy markets, and the third depends on rare consensus among rivals. The outcome will hinge on whether major powers engage diplomatically or treat the proposal as a provocation.

Bottom line — while Iran’s toll proposal may not immediately alter shipping practices, it represents a calculated effort to reshape maritime norms in one of the world’s most vital waterways, with far-reaching implications for global trade, energy security, and international law.

Source: Investinglive