Strait of Hormuz fees raise oil market concerns

Oman’s reputation for neutrality has earned it the nickname “Switzerland of the Middle East.”

But the country south of the Strait of Hormuz has adopted a deliberately opaque diplomatic strategy in discussions about tolls on the vital waterway, leaving markets with a “blind spot” as to what will happen next, analysts told CNBC.

Oman has served as a key mediator in regional crises and is one of the few countries trusted by both Iran and Washington, keen to ensure flows resume through the strait after it was cut off during the war and caused a global energy shortage.

Oman, which is located on the southeast coast of the Arabian Peninsula and across the strait from Iran, is holding joint talks with Iran on a new maritime security order amid reports that the two countries may push for a transit fee.

Oman has said any deal would follow international law, but the potential for a financial system to be built on the waterway, which normally handles about 20% of the world’s oil, has raised concerns.

Analysts told CNBC that Oman’s ability to impose service fees is within strict legal limits, given that the strait is subject to the transit passage principle, which does not allow states to charge ships for passage. However, service fees may be one way around this.

Dania Safer, executive director of the Gulf International Forum, a think tank in Washington, D.C., said Oman’s position on tolling and tolling was likely intentionally unclear.

“You have a regional power like Iran, and then you have a world power like the United States that is putting pressure on Oman,” Safer told CNBC in a phone interview.

“So they are trying to use some degree of strategic ambiguity to stay as far away from the conflict as possible and not weaken these very powerful players.”

If Gulf states and key international players give Oman the green light, the country will likely move forward with a type of toll-service system in the Strait of Hormuz, Tafer said.

He added that while the entry into force of fees and tolls would be seen as a political disappointment, the market would “react accordingly” to conditions that allow ships to sail safely again.

A spokesperson for Oman’s Ministry of Foreign Affairs was unavailable for comment when contacted by CNBC.

The United States is firmly opposed to any tolls in the Strait of Hormuz.

US President Donald Trump’s administration has previously threatened to impose “aggressive” sanctions against Oman if it is seen to be helping Iran establish a toll system.

Treasury Secretary Scott Bessent said in a May 28 post on X that “all countries should completely reject any effort by Iran to interfere with the free flow of commerce.”

Under the terms of a memorandum of understanding between the United States and Iran signed on June 17, the Iranian government cannot impose tolls on ships during the 60-day negotiation period for a durable solution.

But Iran is insistent on gaining international recognition of its control of the Strait of Hormuz, Reuters reported on Wednesday, citing two senior Iranian sources. This also includes the ability to impose fees on vessels entering and exiting the bay, the report added.

Andrew Lever, a non-resident scholar at the Carnegie Middle East Program, said Oman, with its reputation as a middleman, is “increasingly caught between Tehran’s demands to pay some tolls across the strait and the US’ demands to prevent that from happening.”

“As a result, we have seen Omani diplomats go back and forth between insisting that no tolls will be charged and suggesting that ships may be required to pay fees other than tolls,” Lever told CNBC via email.

The challenge for Oman is that because of its geography, it has a direct stake in what happens with the Strait of Hormuz, Lever said. He added that the country has security reasons and economic interests to go along with Iran’s plan or charge something if Oman also gets a share.

“Oman is very likely to continue to co-sign or make more modest changes to some kind of Iranian service charge plan until it comes into direct conflict with its Arab neighbors and the United States,” Lever said.

Neil Quilliam, an energy policy, geopolitics and foreign affairs expert on the Middle East and North Africa at Chatham House, said the combination of geography and diplomacy would give Oman influence over the rules, procedures and future arrangements governing the Strait of Hormuz.

“Markets value disruption risk but tend to pay less attention to governance risk. That creates a blind spot,” Quilliam told CNBC via email.

He added: “Changes in how the Straits are managed, even if gradual and negotiated, could change costs, compliance requirements and insurance mechanisms, even in the absence of a dramatic security event.”