Strait of Hormuz Fee Debate
Oman Weighs Strait of Hormuz Transit Fees, Drawing International Opposition Over Free Passage
Key Points
Several Western powers—US, UK, France, Saudi Arabia, and the UAE—have warned that any transit fees would violate international maritime law and undermine the principle of free, open passage through the Strait of Hormuz.
Tehran is pushing for joint management of shipping traffic in the Strait of Hormuz, with Oman potentially coordinating mechanisms for shipping and associated costs alongside Iran.
Oman and other Gulf states are looking at Malacca as a model, noting that while navigation services exist at chokepoints like Malacca, there are no compulsory transit fees there.
U.S. officials have reiterated opposition to any transit fees, with Secretary of State Marco Rubio stating that there should be no taxes or tolls and emphasizing free passage for global shipping.
Oman has quietly told European officials that the Strait of Hormuz will not return to its pre-war normal — and that ships transiting the world's most critical oil chokepoint may soon face charges for navigation support, pollution control, and de-mining services, according to Bloomberg. The signals come even as Omani Foreign Minister Badr Al-Busaidi publicly denied plans for "transit fees" at a Gulf Cooperation Council meeting in Bahrain on June 25.
Roughly 20% of the world's seaborne oil and liquefied natural gas moves through the strait each day. Since a mid-June ceasefire, traffic has recovered to just 40% of pre-war levels — about 48 vessels daily, according to The Guardian. The fees debate is now a diplomatic flashpoint, with France, the U.S., and Gulf allies pushing back hard.
Oman Sends Two Very Different Messages
Oman is running what analysts call a "two-track" strategy. Publicly, FM Al-Busaidi told GCC partners in Bahrain that "future arrangements do not entail the imposition of any transit fees," according to Arab News. Privately, Omani officials told European diplomats the opposite — that pre-war conditions are gone and costs must be shared.
On June 23, Iran and Oman issued a joint statement in Muscat forming a working group to study "maritime services and associated costs," according to Al Arabiya. The fees being discussed include pollution cleanup, navigation aids, and de-mining. Officials insist these are service charges — not tolls. But critics say the difference is just words.
Iran Wants Joint Control — and a Cut of Revenue
Tehran is pushing for joint management of all shipping traffic in the strait. The Islamic Revolutionary Guard Corps has warned that only "Tehran-approved routes" are valid, according to Al Jazeera. Iran has reportedly sought fees as high as $2 million per ship or $1 per barrel — funds it says would pay for post-war reconstruction.
The push stems from Clause 5 of a June 17 U.S.-Iran Memorandum of Understanding, which tasks Iran and Oman with defining the "future administration and maritime services" of the strait, according to The Maritime Executive. Oman's FM Al-Busaidi chaired a meeting with Iranian officials as early as May 24 to discuss "repackaging" tolls as navigational services, according to the Jerusalem Post.
U.S. and Allies Draw a Hard Line on Free Passage
Secretary of State Marco Rubio was blunt. "You can call it a toll, you can call it a fee — whatever you want," he said, according to the Washington Times. "There's not going to be any fees or tolls." Rubio warned that any fee system would cause "total chaos" and set a dangerous global precedent for other shipping chokepoints.
Saudi Arabia and the UAE have also stated that mandatory fees would violate international law. Under the UN Convention on the Law of the Sea (UNCLOS) — the global rulebook for oceans — coastal states cannot charge ships for the right to pass through international straits. The World Shipping Council has warned that breaking this rule could trigger retaliatory measures worldwide, according to gCaptain.
Malacca Model Cited, but the Comparison Has Limits
Oman and Iran point to the Strait of Malacca as a working model. Since 2007, Malaysia, Indonesia, and Singapore have run a cooperative fund where shipping nations like Japan voluntarily pay for navigation aids and environmental protection — with no mandatory tolls, according to gCaptain. Proponents say Hormuz could work the same way.
Critics say the comparison breaks down fast. Malacca fees are voluntary. The Hormuz proposal, as described to European officials, could involve mandatory charges — which is a fundamentally different thing under maritime law. Analysts at Kpler warn that even a modest fee could trigger a global inflation surge by raising freight and insurance costs across 20% of world energy trade. French President Macron is set to raise the issue directly with Sultan Haitham in Paris on June 29, according to Bloomberg.
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