Oman Presents Gulf-Backed Plan

for Voluntary Fees to Use Strait of Hormuz

Report By Y-Trendz

Dubai/Muscat — July 29, 2026

Oman has put forward a Gulf state-backed proposal to Iran for managing the Strait of Hormuz, one of the world's most critical oil and gas chokepoints, through a system of voluntary transit fees rather than

unilateral Iranian control of the waterway.

The Proposal

Oman presented Iran with a plan backed by Gulf states to manage the Strait of Hormuz, including collecting voluntary fees for using it, according to a Gulf source and a Western diplomat who briefed Reuters on Tuesday, July 28. The plan is intended to serve as a basis for ending the disruption to trade through the strait caused by the ongoing US-Israeli war on Iran.

Under the proposal, Iran would not exercise sole control over the strait, and any fees collected would be strictly voluntary. The system is modelled directly on the one used in Asia's Strait of Malacca, where Malaysia, Indonesia and Singapore do not charge ships for passage but instead invite voluntary contributions to fund navigation, environmental protection, and search-and-rescue operations. Singapore's Maritime and Port Authority has previously stressed that under the UN Convention on the Law of the Sea, the right of transit passage cannot be impeded, and the three Malacca states do not impose mandatory fees or tolls on ships exercising that right — funding upkeep instead through a voluntary navigation-aid fund backed by groups such as the Nippon Foundation.

A Western diplomat briefed on the matter compared the arrangement to a voluntary carbon offset added to an airline ticket, something a buyer can choose to opt into rather than a compulsory charge.

Why It Matters

The Strait of Hormuz carried roughly a fifth of global oil and liquefied natural gas flows before the current war, and Iran effectively shut the strait to ships other than its own after the United States and Israel launched attacks on February 28. Notably, the earlier framework floated by some parties held that any country or company that accepted alternative payment arrangements would risk being denied passage through the strait by Iran's armed forces — underscoring how contentious and high-stakes the question of who controls transit through the waterway has become.

Energy analysts say that if Oman's plan succeeds in stabilizing the strait, downward pressure on global oil prices is likely to continue, though a resumption of US strikes could just as quickly send prices climbing again for drivers worldwide. A voluntary fee system would represent a significant climbdown from Iran's original demand for mandatory payments, but the arrangement still requires Tehran's formal agreement to move forward.

Iran's Response So Far

As of Monday evening, there had been no formal response from Iran to the proposal, according to the Gulf source, though Omani officials had met with Iranian counterparts in Tehran over the weekend. Iran's Foreign Minister Abbas Araghchi discussed the Strait of Hormuz issue with his Omani and Saudi counterparts, emphasizing the need to strengthen cooperation and advance joint diplomatic efforts to restore stability in the region and lift what Tehran describes as insecurity imposed on the strait by US actions. Iran has separately asserted that its interim arrangement with the US already allows it to manage shipping on the waterway for now, and it has objected to US efforts to support an alternate shipping route passing close to Oman's coast.

Wider Diplomatic Backdrop

The proposal comes just days after President Donald Trump abruptly called off a two-week US bombing campaign against Iran over the weekend, in what was described as his latest strategic reversal on the conflict. Trump said there were "good talks" under way with Iran, though he also threatened to restart strikes if negotiations failed to deliver results; Iran, for its part, has denied that it is seeking to resume talks with Washington.

Gulf Cooperation Council foreign ministers held a video call on Tuesday to discuss the latest developments in the conflict, including ways to intensify cooperation on issues related to the freedom and safety of vessels transiting the waterway, according to a statement from Qatar's Foreign Ministry. Separately, Iran's joint military command again rejected an earlier plan put forward by Trump under which damages to vessels would be paid out of frozen Iranian assets, according to Iranian state media.

Complicating Factors

Adding further pressure on regional shipping, the Iran-aligned Houthi movement in Yemen has opened a new front against US interests, a development that risks compounding the disruption already affecting one of the world's busiest energy corridors even as diplomatic efforts continue.

The coming days are likely to prove decisive: with Trump's threat of renewed strikes still on the table and Iran yet to formally respond to Oman's proposal, the fate of the Hormuz fee plan — and the broader question of who ultimately governs passage through the strait — remains unresolved.