Iran and Oman propose fee plan for Strait of Hormuz, sources say
Iran and Oman have presented the U.S. with a proposal to administer the Strait of Hormuz that includes the joint collection of administrative fees by the two Middle East nations, four sources told NBC News.
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In a memorandum of understanding signed last month, the U.S. and Iran agreed ships could safely and freely transit the strait for 60 days and that afterward administering the critical waterway would be left to be defined by Iran and Oman in discussions with other Persian Gulf states.
Omani Foreign Minister Sayyid Badr bin Hamad Al Busaidi said in an interview this week that Oman does not support imposing fees on ships to transit the Strait of Hormuz. But he drew a distinction between mandatory fees and voluntary charges to shipping companies to maintain the vital waterway, in a manner similar to models used in the Strait of Malacca and Singapore.
Two sources familiar with the discussion and a regional source said the plan has recently been delivered to the U.S., but a Middle East official said that while the U.S. had been consulted on possible mechanisms for the strait, Oman has not delivered a formal proposal.
The new proposal for the future of the global commercial shipping route was first reported by The New York Times, citing an Iranian official and four diplomats with knowledge of the matter.
A source familiar with the discussion said that U.S. negotiators have concerns about the proposal but that they intend to discuss it with the Omanis and believe the issue can be resolved.
“The American team values its partnership with Oman and is confident that it can resolve differences at the technical level,” the source said.
The source emphasized that the Omanis have maintained their commitment to let shipping traffic pass without tolls and noted that the proposal did not contain any mandatory tolls.
White House spokesperson Anna Kelly said in a statement, “President Trump has been clear that Iran cannot toll the Strait, which is an international waterway.”
Any monetization of the strait would be a dramatic change from the situation before the war, when commercial ships carrying 20% of the world’s oil and natural gas supply transited the waterway without fees. Trump administration officials have repeatedly said a toll system would not be acceptable.
“No country is allowed to charge tolls or fees on an international waterway,” Secretary of State Marco Rubio told reporters during a trip to the Middle East last week. “That’s existing international law. That’s the way it is in international waterways all over the world, and that’s the way we expect it’ll be here.”
The Middle East official told NBC News that Iran was pushing for the fees and that it believed the Americans would eventually agree to some version of them.
Fees for the strait would be collected in consultation with the international community and through the International Maritime Organization, the official said. And if the participating countries agree, the funds would be shared between Iran and Oman, the official added.
The funds could be used for assessing environmental risk, rescue efforts and technical support, similar to the Strait of Malacca, the official said.
The official noted that Oman has spent money on maintaining the Strait of Hormuz for maritime, environmental and navigational services for many years without collecting any fees and added that the issue is still being discussed and is not a final proposal.
“Maybe now time is suitable to charge something,” the official said.
