Iran and Oman in talks over Strait of Hormuz ship payment system, defying US warnings

Iran is quietly negotiating with the Gulf state of Oman over a plan to charge vessels for passing through the Strait of Hormuz, a move that puts Tehran on a direct collision course with US President Donald Trump even as both sides claim to be working toward a diplomatic resolution, according to a New York Times report. The Plan Taking Shape in the Strait of Hormuz Behind the public posturing of ceasefire declarations and diplomatic overtures, Iran and Oman have been holding discussions over something far more concrete: a system that would generate revenue from one of the busiest and most consequential shipping lanes on heart- Strait of Hormuz. The talks, confirmed by two Iranian officials to New York Times, centre on a proposed arrangement in which vessels transiting the Strait of Hormuz would be charged fees, with Oman receiving a share of the proceeds. Oman, which shares a coastline with the Gulf of Oman adjacent to the strait, was initially cool to the idea. It has since warmed to it considerably, having calculated the potential financial upside of participation. The discussions were first reported by Bloomberg News. Nothing has been signed. Whether anything will be is still an open question. How Iran Built Its Grip on Global Shipping To understand why these talks are happening, it helps to go back to late February, when American and Israeli forces struck Iran. Tehran's response was not purely military. Iranian authorities effectively throttled commercial traffic through the Strait of Hormuz, bringing international shipping to a near halt and sending energy prices sharply higher across global markets. The disruption was a demonstration of leverage as much as a retaliation. About a fifth of the world's seaborne oil and natural gas moves through the strait. By showing it could bring that flow to a standstill, Iran established a bargaining chip it has since been reluctant to surrender. A ceasefire followed. But Iran kept its eye on the waterway. Iran Creates a New Authority to Control the Strait On Wednesday (20 May), Iran's newly established Persian Gulf Strait Authority announced on social media that it had "defined the boundaries of the Strait of Hormuz management supervision area," adding that vessels would henceforth require a permit from the authority before passing through. The Gulf of Oman, which ships must cross before reaching the strait from the east, falls within the zone the authority claims to oversee. Iranian state media outlet Press TV has separately reported that a new mechanism is being put in place to control maritime traffic along a designated route and charge for what it calls "specialised services." Why Iran Is Calling It a Fee and Not a Toll The choice of language is deliberate and legally calculated. A straightforward toll on passage through an international strait would violate the 1982 United Nations Convention on the Law of the Sea, which guarantees vessels the right to transit such waterways without impediment. Iran is not a signatory to the convention, but experts widely regard its core principles as binding on all nations under customary international law. Charging for services rendered to ships is a different matter and is permitted under certain conditions. By framing the proposed charges as fees for specific services rather than payment for passage itself, Iran is attempting to construct a legal justification for what would otherwise be plainly unlawful. James Kraska, a professor of international maritime law at the US Naval War College and visiting professor at Harvard Law School, said the navigational rules governing international straits are "virtually universally accepted" and that "Iran has acquiesced to this for decades." He acknowledged that "reasonable fees are permitted in some situations," but cautioned that the burden would fall on Iran to prove its charges are genuinely tied to services provided rather than passage itself. "They are trying to cleverly fit" their proposal into the legal framework, Kraska said. Dressing up a transit charge as a service fee, he added, would be "almost like the mafia saying you have to pay protection money." Washington Says No, and Means It The Trump administration has left little room for ambiguity on where it stands. Speaking from the Oval Office on Thursday, President Donald Trump was blunt. "We want it free," he said. "We don't want tolls. It's international. It's an international waterway." Secretary of State Marco Rubio went further, framing any Iranian fee system as a dealbreaker for the wider diplomatic process. "It can't happen," Rubio said. "It would be unacceptable. It would make a diplomatic deal unfeasible if they were to continue to pursue that."