Iran and Oman negotiate a payment system for ships in the Strait of Hormuz

Iran is discussing a partnership with Oman — a U.S. ally — on a system that would charge fees to vessels passing through the Strait of Hormuz, disregarding warnings from the administration of Donald Trump against requiring payments to cross the vital international waterway.

It is unclear whether anything concrete will emerge from the discussions. But the negotiations appear to signal that the U.S. and Iran are no closer to ending a war that has hurt the global economy, despite President Trump’s repeated claims to the contrary. At least publicly, neither side has shown a willingness to make concessions.

After suffering attacks from American and Israeli forces in late February, Iran effectively halted commercial traffic through the strait, disrupting international shipping and driving up energy prices. Having established its influence over the global economy, Iranian officials began discussing ways to maintain control over the waterway and use it to generate revenue.

On Wednesday (20), amid discussions with Oman, Iran’s newly created Persian Gulf Strait Authority posted on social media that it had “defined the boundaries of the supervisory management area of the Strait of Hormuz” and that passage would require a permit. The Gulf of Oman lies adjacent to the strait.

Trump has repeatedly condemned the possibility of any Iranian tolls in recent months and even floated the idea that the U.S. itself could charge them as the self-proclaimed winner of the war. He also suggested the revenue could be shared.

On Thursday (21), he again rejected the notion of any payment for passage through the strait. “We want it to be free,” he said in the Oval Office. “We don’t want tolls. It’s international. It’s an international waterway.”

U.S. Secretary of State Marco Rubio also rejected the idea. “That cannot happen,” he said. “It would be unacceptable. It would make a diplomatic agreement unworkable if they continued pursuing this.”

Even after reaching a fragile ceasefire with the U.S., Iran continued exploring the idea of imposing fees on ships transiting the strait, through which about one-fifth of the world’s seaborne oil and natural gas passes. Iranian officials said the charges could include service, transit, and environmental fees, among others.

In recent days, Press TV, the Iranian state-controlled foreign media outlet, reported that Iran had created a new mechanism to control maritime traffic through a designated route and by charging fees for “specialized services.”

Two people familiar with discussions on managing the waterway said Iran was not planning a toll system that would charge only for transit. Instead, talks with Oman explored a proposal to charge vessels for services provided.

Oman initially rejected a partnership with Iran in the strait, but discussions are now underway about possible revenue-sharing, according to two Iranian officials familiar with the negotiations who were not authorized to speak publicly.

The officials said Oman told Iranian authorities it was willing to use its influence with Gulf neighbors — including Bahrain, Kuwait, Qatar, Saudi Arabia, and the United Arab Emirates — as well as with the U.S. to advance the plan after recognizing the potential economic benefits of a fee-based system.

Negotiations between Oman and Iran over a potential payment system in the strait were first reported by Bloomberg News.

Iran and Oman appear to emphasize that the proposed system would involve fees, not tolls — a legally significant distinction. A toll system that simply charges ships for passing through the waterway would be illegal under international law, but charging fees for services provided to vessels, such as port waste disposal, is allowed under certain circumstances.

Still, experts say that if the fee system is merely a toll by another name, it would not be considered legal.

The 1982 United Nations Convention on the Law of the Sea established the right of vessels to pass through international straits without obstruction, provided they comply with safety and pollution-control regulations, procedures, and practices. Iran is not a party to the convention and says it is technically not bound by it. Oman is a signatory.

However, the convention’s rules and principles reflect customary international law and are binding on all nations, whether signatories or not, said James Kraska, professor of international maritime law at the U.S. Naval War College and visiting professor at Harvard Law School.

The navigation regime for straits, which prohibits payment for passage, is “virtually universally accepted,” he said, and “Iran has acquiesced to it for decades.” “Reasonable fees are permitted in some situations,” he added.

But the challenge for Iran would be proving that the fees it seeks are genuinely reasonable and correspond to the services provided, he said.

“They are trying to cleverly fit their proposal within the legal framework”, Kraska said. Still, he added, charging for passage through a waterway that has long been free while calling the toll a fee would be “almost like the mafia saying you have to pay protection money.”

Source: Folha de S. Paulo

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