Oman has rejected Iran's proposal to implement service fees on commercial vessels transiting the Strait of Hormuz, a move that averts a potential confrontation with the United States. The quiet refusal comes despite a claim by Iran's Islamic Revolutionary Guard Corps (IRGC) that an agreement had been reached.
A high-ranking regional official confirmed that Oman declined to consent to charging fees, even on a voluntary basis, for environmental and security services. This decision contradicts a recent statement from the IRGC, which had asserted that an accord was in place regarding revenue sharing from the strait.
US officials indicated that the terms of such a deal had not been finalized by Iran, suggesting the IRGC's announcement was premature. President Trump had previously threatened military action against Oman if it were to agree to any form of tolling on the crucial maritime chokepoint. Trump stated on August 17 that if Oman "gets in the way, we’ll bomb the s–t out of them."
Any agreement on fees would likely require U.S. consent, as reimposed naval blockades by the United States could render such a toll-charging deal ineffective without American approval.
Oman, a nation that considers itself an American ally, has historically played a mediating role in regional affairs. The country has engaged in efforts to de-escalate tensions between the U.S. and Iran, including facilitating nuclear talks. Oman also played a part in arbitrating the release of Americans held by the Houthi movement in Yemen, brokering a cease-fire between the U.S. and the Houthis that has remained in effect since May 2025.
Iran had reportedly sought to pressure Oman, which borders the southern coast of the Strait of Hormuz, into accepting a post-war framework that would grant Tehran greater influence over the international oil and gas corridor.
Iranian Foreign Minister Abbas Araghchi met with Omani Foreign Minister Sayyid Badr Albusaidi in Tehran last Tuesday to discuss the waterway. Hours after their meeting, IRGC spokesman Hossein Mohebbi stated that agreements had been reached concerning each country's share of the strait's waters and revenue.
Sources familiar with the negotiations indicate Oman is now hesitant to proceed with the Iranian proposal, reportedly in consideration of broader peace efforts. Concurrently, the United Arab Emirates and its financial institutions used by Iran-linked entities are facing increased scrutiny from Washington.
Treasury Secretary Scott Bessent recently announced actions targeting transactions with Banque Misr UAE and sanctioned the manager of Bank Melli’s Dubai branch for alleged dealings with Iran. These actions follow the sanctioning of 154 other UAE-based entities over the past year as part of "Operation Economic Outcast," aimed at compelling Iran to negotiate a peace deal through economic pressure.
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A Republican source noted that the UAE needs to "step up here," accusing the nation of "playing both sides" by soliciting U.S. military engagement while simultaneously making substantial payments to Iran.