Iran has rejected Oman's proposal for joint oversight of the Strait of Hormuz and made a counterproposal of its own. Iran's Deputy Foreign Minister Kazem Gharibabadi said in a state broadcast on July 28 that Oman's proposal had not sufficiently addressed Tehran's concerns about control of the strait.
The strait has been at the centre of the US-Iran conflict since late February 2026, when US-Israeli attacks began on Iran. Before the war, about one-fifth of the world's oil and liquefied natural gas supplies were shipped from Gulf producers through this route. Shortly after the war began, Tehran closed the strait, triggering global supply challenges, and the US later imposed its own blockade on Iranian ports.
A memorandum of understanding signed by Iran and the US on June 17 was supposed to reopen the strait to shipping without charge for at least 60 days. But the vague wording caused disagreements over who has ultimate control of the waterway, which passes through the territorial waters of both Iran and Oman, and over which routes ships should take.
Oman's proposal would split control 50-50, with Iran controlling transit lanes on its side of the strait and Oman controlling lanes along its coast. It also suggested voluntary fees from shipping vessels that would go to both countries. The proposal appears modelled on the Strait of Malacca arrangement, and the foreign ministers held a meeting on July 28 to discuss regional security. But Gharibabadi said Iran rejected the proposal based on its own national security concerns.
Iran's counterproposal would have Iran manage shipping through its side of the strait, with Oman managing part — but not all — of the opposite lane. Gharibabadi said the plan would let Iran exercise oversight over both inbound and outbound traffic.
Gharibabadi warned the strait will remain closed if Oman rejects the plan, and that it could not return to pre-war arrangements when ships passed without paying any form of toll. Oman is now considering another proposal that could include three routes: one through Iran's waters, an international lane, and a third through Omani waters. It is unclear how Tehran will react, though sources say Iran is demonstrating some flexibility.
Other points of contention include the direction of passing ships, fees to be collected, who will define any arrangements, and mine clearance operations. The US has accused Tehran of placing mines in the strait, which Tehran has not confirmed. The did issue a map of a permitted route for approved shipping in April, stating it would ensure ships avoided any potential mines — a route that took ships much closer to the coast of Iran than previously.
, a professor at , noted the Strait of Malacca model raises about $70m annually through its voluntary fees system. That is a far cry from the $1m per ship that has reportedly been proposed by Tehran as a service fee in the Strait of Hormuz.
At $1m per ship, the fee would dwarf the Malacca model's $70m annual take — the dispute is about far more than covering the cost of running the strait.
Tehran has said shipping fees would go towards reconstruction following widespread infrastructure damage caused by US-Israel attacks.