Strait Of Hormuz: Oman Presents Gulf-Backed Plan For Voluntary Ship Fees

Oman has presented Iran with a Gulf-backed proposal to manage the Strait of Hormuz through a system of voluntary payments by ships using the strategic waterway, an initiative aimed at restoring trade through the route after months of disruption caused by the U.S.-Israeli war on Iran, according to Reuters.

The proposal is intended to bridge differences between Iran and the United States over the future of the strait, one of the world's most important energy corridors. According to Reuters, it would allow Iran to manage the strait alongside Oman while replacing mandatory fees with voluntary contributions, which could serve as a basis for ending the disruption to trade through the strait.

A Gulf source and a Western diplomat told Reuters that Oman presented the proposal with the backing of Gulf states. The plan comes after the conflict disrupted shipping through the Strait of Hormuz, through which around a fifth of global oil and liquefied natural gas flowed before the war.

President Donald Trump, who abruptly called off a planned two-week U.S. bombing campaign over the weekend in his latest strategic U-turn, said there were "good talks" under way with Iran but warned that strikes would resume if negotiations failed. Iran has denied seeking to restart talks with the United States.

Washington launched its renewed bombing campaign earlier this month to break Iran's grip on the strait. Iran effectively shut the waterway to all ships except its own after the United States and Israel attacked on February 28.

A deal reached between Washington and Tehran last month partially reopened the strait, but the agreement collapsed in early July after Iran fired on ships using a channel it does not approve.

Iran has said it wants to manage the strait alongside Oman, which controls the opposite shore, and charge service fees to ships using it. The United States wants a return to the pre-war arrangement, under which vessels passed freely without payments, and says mandatory fees would be illegal.

Under the Omani proposal, Iran would not exercise sole control over the strait and any payments would be voluntary, the Gulf source and the Western diplomat briefed on the discussions told Reuters.

The proposed arrangement is similar to the system used in the Strait of Malacca, where Indonesia, Malaysia and Singapore invite ships to make voluntary contributions to support navigation, environmental protection and search-and-rescue operations.

The Western diplomat compared the proposal to voluntary carbon offset payments for flights, where passengers can choose whether to contribute when buying a ticket.

The Gulf source said that, as of Monday evening, Iran had not formally responded to the proposal. Omani officials met Iranian counterparts in Tehran over the weekend.

Iranian Foreign Minister Abbas Araqchi discussed the Strait of Hormuz with his Omani and Saudi counterparts on Monday and stressed the need for regional cooperation, according to a statement from Iran's Foreign Ministry.

Trump said he halted the latest U.S. bombing campaign after receiving advice from military commanders that the strategy had run its course. The 13 nights of renewed U.S. strikes killed scores of people in Iran and destroyed bridges and tunnels across the country's south, as well as military targets.

Iran responded by attacking U.S. bases in neighbouring countries, killing four American service members, and by striking civil infrastructure in Gulf states, saying the attacks were retaliation for U.S. strikes on civilian targets.

Tehran has said it will hold fire as long as Washington does. However, drone attacks were reported in Jordan, Saudi Arabia and northern Iran on Monday, while Jordan reported downing another drone on Tuesday.

Speaking on Monday, Trump expressed optimism that negotiations could end the five-month conflict while warning that military action would resume if diplomacy failed.

"I think there's a good chance that something could happen, and if it does, good, if it doesn't, we go back to doing what we were doing two days ago."

Iran says it has not sought any new negotiations with the United States, accusing Washington of violating the agreement reached last month on a framework for talks aimed at ending the war.

Trump is scheduled to meet Israeli Prime Minister Benjamin Netanyahu in Washington on Tuesday. Although Israel took part in the initial bombing campaign, it has not participated in the subsequent peace talks, and recent relations between the two leaders have been strained.

The U.S. president has also sought to rein in Netanyahu from attacking targets in Lebanon in an effort to weaken Iran-backed Hezbollah militants, arguing that such action could complicate peace talks with Tehran.

According to Reuters, the end of the U.S. bombing campaign over the weekend sent oil prices down by around 8% on Monday, with the decline continuing on Tuesday. Brent crude futures were down by more than 2.5% at around $86 a barrel by mid-morning on Tuesday.

Washington and Tehran reached an agreement in June on a framework for talks intended to conclude by the end of August to address issues including Iran's nuclear programme. However, the two sides dispute the meaning of the memorandum's language on the Strait of Hormuz. Washington insists it requires Tehran to allow free travel through the waterway, while Iran says it grants the country the authority to supervise transit.