A proposed arrangement between Iran and Oman to regulate shipping through the Strait of Hormuz is facing significant challenges over US sanctions, international maritime rules and restrictive insurance clauses, according to industry sources cited by Reuters.
Under the proposal, Iran would have the ability to intervene in inbound vessel traffic when necessary, while ships exiting the Gulf would use a route between Iran and Oman and obtain clearance through Oman after notifying Iranian authorities.
The Strait of Hormuz, a critical global energy corridor, carried around one-fifth of the world’s oil supplies and other essential commodities before the conflict triggered by US-Israeli airstrikes on Iran at the end of February. The waterway has traditionally remained open to international shipping without transit fees.
Dispute Over Transit Fees
The biggest obstacle in negotiations is the question of fees. Iran is reportedly seeking charges equivalent to 5%–7% of the value of cargoes transported through the strait, while Oman is discussing a fee of around 3%. The United States, meanwhile, wants shipping through the waterway to remain completely free of charges.
Leading global shipping associations have warned that compulsory transit or service fees would amount to a “toll in all but name” and could undermine the internationally recognised legal framework governing straits used for international navigation.
The International Maritime Organization (IMO) has previously called on countries around the Strait of Hormuz to guarantee the non-discriminatory and unimpeded right of transit passage for all ships, with passage remaining free of tolls and charges.
US Sanctions Raise Compliance Risks
For shipping companies and oil traders, any payment to Iranian authorities could create serious compliance risks.
The United States has imposed sanctions on Iran’s Persian Gulf Strait Authority, established in May to operate the waterway. Washington has also prohibited US persons from receiving services from the Iranian government related to guarantees of safe passage.
Industry sources warned that payments to Iranian authorities could potentially expose companies to sanctions and asset-freeze risks.
Insurance Rules Add Another Complication
The situation has been further complicated by new insurance restrictions introduced by the Lloyd’s Market Association (LMA) in late July.
A clause developed for war-risk insurance policies terminates coverage for vessels that pay a transit fee, toll or other charge for passage through the Strait of Hormuz. Insurers would not be liable for such payments and could be released from their obligations relating to the vessel if a prohibited payment is made.
Ships transiting the strait already face additional war-risk premiums to maintain insurance coverage during the journey.
The conflicting requirements have left shipping companies in what one insurance industry source described as a “catch-22”: Iran could require a toll for passage, while insurers may refuse to provide coverage to vessels that pay it.
Global Shipping Watches Closely
The dispute over control and access to the Strait of Hormuz has emerged as one of the key sticking points in efforts to resolve the conflict.
For global shipping, energy markets and supply chains, the outcome could have far-reaching consequences. Any system that introduces mandatory fees or additional clearance requirements could increase transportation costs, create new compliance obligations and potentially disrupt one of the world’s most important maritime trade routes.
