US-Iran Ceasefire Deal: Iran and Oman May Levy Transit Fees on Ships Passing Through Strait of Hormuz

A newly agreed two-week ceasefire between the United States (US) and Iran has introduced a significant proposal that could reshape maritime movement through the Strait of Hormuz. As part of the plan, both Iran and Oman may be allowed to impose transit fees on vessels passing through the strategically vital route, which handles nearly one-fifth of global oil trade.

Iran and Oman Likely To Impose Transit Fees on Ships Passing Through the Strait of Hormuz

The ceasefire agreement, reached early Wednesday, aims to bring an end to a 40-day conflict that began on February 28. During the hostilities, the waterway was effectively disrupted due to repeated attacks on vessels, leading to a sharp spike in global oil prices. As part of the understanding, Tehran has conditionally agreed to reopen the crucial shipping route.

Why Strait of Hormuz Is Crucial? Know About It

The Strait of Hormuz is a narrow maritime passage located in West Asia, connecting the Persian Gulf to the Gulf of Oman and further to the Arabian Sea.

Geographically, the strait lies between Iran to the north and Oman to the south, specifically the Musandam Peninsula, which is part of Oman but separated from its mainland. At its narrowest point, the strait is about 34 kilometres wide, while the actual shipping lanes used by vessels are much narrower, with designated channels for incoming and outgoing traffic.

The Strait of Hormuz serves as the only sea passage from the Persian Gulf to the open ocean, making it geographically critical for countries like Saudi Arabia, Iraq, Kuwait, and the United Arab Emirates, which depend on this route for exporting oil and gas.

Historically regarded as an international waterway, the strait has remained toll-free, allowing uninterrupted movement of global shipping traffic without any transit charges.

Flexible Fee Structure Planned to Regulate, Not Restrict Maritime Traffic

According to reports, the proposed transit fee structure may vary depending on factors such as the type of vessel, its cargo, and prevailing operational conditions. Iran's Deputy Foreign Minister Kazem Gharibabadi indicated that Tehran is working in coordination with Oman to draft a formal framework for implementing such charges. He emphasised that the objective is to regulate and facilitate maritime movement rather than restrict it.

However, the proposal has faced resistance from several Gulf nations. Countries such as the United Arab Emirates and Qatar have opposed the idea, advocating for free and open navigation through the strait. They have also suggested that any discussions on financial mechanisms should be deferred until broader agreements are reached.

From a legal standpoint, the issue remains complex. Under the United Nations Convention on the Law of the Sea (UNCLOS), countries bordering international straits are not permitted to charge fees solely for granting passage. However, they may impose limited charges for specific services such as pilotage, towing, or port-related assistance, provided such fees are applied uniformly and do not discriminate against vessels from particular nations.

US-Iran Ceasefire: Trump's 10-Point Proposal

Commenting on the development, US President Donald Trump stated that Iran had shared a 10-point proposal, which he described as a "workable basis" for negotiations. He expressed confidence that the agreement could be finalised within the two-week ceasefire period, although specific details of the proposal were not disclosed.

Islamabad to Host Key US-Israel discussions

Further negotiations on long-term peace and the future governance of the Strait of Hormuz are expected to take place soon. Discussions involving the US and Israel are scheduled to begin in Islamabad on Friday, where broader issues related to regional stability and maritime operations are likely to be addressed.