Oman has rejected Iran's proposal to jointly charge service fees on commercial ships transiting the Strait of Hormuz, a move that averts a potential confrontation with the United States. The Iranian Islamic Revolutionary Guard Corps (IRGC) had previously claimed an agreement had been reached, but a high-ranking regional official confirmed Muscat declined the proposal, even on a voluntary basis for environmental and security services.
This development follows direct threats from President Trump, who had stated on August 17 that the U.S. would take military action against Oman if it interfered with the waterway. Trump's administration had reimposed naval blockades on Iran, which would render any toll-charging deal ineffective without U.S. consent.
Oman, while considering itself an American ally, has historically played a mediating role in the region. This included efforts to de-escalate tensions between the U.S. and Iran, as well as arbitrating the release of Americans held by Yemen's Iran-backed Houthi movement. Oman also brokered a cease-fire between the U.S. and the Houthis in May 2025, which remains in effect.
Iran had reportedly sought to pressure Oman, which borders the southern coast of the strait, into accepting a post-war framework that would grant Tehran increased authority over the vital oil and gas chokepoint. The Iranian Foreign Minister Abbas Araghchi met with Omani Foreign Minister Sayyid Badr Albusaidi in Tehran last Tuesday to discuss the waterway, shortly before the IRGC spokesman announced agreements on revenue sharing.
Sources familiar with the talks indicated that Oman's current reluctance stems from a deference to broader peace efforts. Concurrently, the United Arab Emirates and its financial institutions have become a focus for Washington. Treasury Secretary Scott Bessent announced actions Friday to cut off transactions with Banque Misr UAE and sanction a Bank Melli manager in Dubai for alleged dealings with Iran. These actions are part of an ongoing initiative, dubbed "Operation Economic Outcast," aimed at pressuring Iran economically to negotiate a peace deal. This follows sanctions placed on 154 other UAE-based entities over the past year, with further actions anticipated.
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