Iran and Oman are reportedly nearing an agreement to reopen the strategically vital Strait of Hormuz with a new navigation arrangement that would grant Tehran increased control over shipping traffic through the waterway, though significant challenges remain before the plan can be finalized and implemented.
According to Iranian officials, the proposed deal would establish a two-lane system: inbound ships would navigate a corridor close to Iran’s coastline, passing through its territorial waters, while outbound vessels would transit a lane near Oman’s coast. The proposal includes the creation of a joint coordination center between Iran and Oman to manage maritime traffic, sharing necessary vessel information. Iranian Deputy Foreign Minister Kazem Gharibabadi described the arrangement as a “new model” distinct from the previous free-navigation framework that governed the strait for decades.
Negotiations, which Tehran says are in their final stages, are reportedly contingent upon the United States lifting its blockade on Iranian ports and easing sanctions—conditions Iran deems essential for the reopening. Iranian Foreign Ministry spokesman Esmail Baghaei confirmed the geographical parameters of the route have been agreed upon, with a joint statement under review, pending approval by Iran’s Supreme Leader and assurances that other parties, principally the United States, will not obstruct the process.
The United States, however, continues to deny that Iran controls or should be allowed to control traffic through the strait, which is an internationally recognized waterway. A U.S. official emphasized that any shipping routes must remain free of approvals, permissions, tolls, or charges, reflecting longstanding international maritime law that prohibits imposing transit fees in such passages. The Trump administration has previously ruled out any agreement that would legitimize Iranian authority over the strait and insists on maintaining open and free navigation.
Complicating the prospect of a deal are concerns from Gulf states, including Saudi Arabia and Oman, which fear that the arrangement would cement Iranian influence over the region’s most critical oil chokepoint. Experts also argue that the deal risks reinforcing the power of Iran’s Islamic Revolutionary Guard Corps, which exerts significant control over Iranian military and security operations in the area.
Furthermore, international shipping and insurance industries warn of substantial challenges tied to Iran’s reported demand to levy transit fees ranging between 5% and 7% of cargo values. Senior Iranian sources suggest Oman is negotiating fees around 3%, while the United States opposes any charges. Such fees could violate existing United Nations maritime frameworks governing traffic through the strait, potentially undermining legal norms regarding transit passage.
The imposition of fees also raises compliance dilemmas under U.S. sanctions, which bar payments to Iranian authorities and may lead to asset freezes for companies involved. In addition, the Lloyd’s Market Association recently instituted an insurance clause voiding coverage for vessels that pay transit fees or tolls in the strait, effectively leaving shipowners exposed to significant risks without insurance protection.
These economic and legal complexities occur amid ongoing regional tensions marked by intermittent attacks on shipping in and near the strait, including recent missile strikes claimed by Yemen’s Iran-aligned Houthi rebels targeting Saudi oil tankers.
U.S. President Donald Trump has expressed cautious optimism about the prospects of a deal but remains firm on preventing Iran from controlling the strait or developing nuclear weapons. He has noted active diplomatic engagement, despite Iran’s denials of direct talks with Washington.
Meanwhile, economic strains within Iran continue to mount, with reports of soaring food prices and rising instances of theft driven by financial hardship, highlighting the broader human and economic costs linked to the continuing conflict and sanctions.
Overall, while the deal between Iran and Oman may represent a preliminary step toward easing tensions and reopening the Strait of Hormuz, significant political, legal, and logistical hurdles remain, suggesting the waterway’s status as a contested geopolitical flashpoint will persist in the near term.