Staff Reports
The short version: Iran and Oman just agreed to form a joint committee to “follow up” on how navigation, services and fees in the Strait of Hormuz will be handled. Call it a friendly chat — or call it the first step toward a paywall for one of the world’s busiest oil routes. Either way, this is not a routine administrative meeting. It matters to global trade, American security, and the rule of law on the high seas.
What Iran and Oman actually announced
The two governments said their foreign ministries will lead a joint working group to discuss “the future administration of navigation in the Strait of Hormuz, the services to be provided there and the associated costs,” all “in line with international standards.” Iran says the work follows a U.S.–Iran memorandum of understanding and couches proposed charges as “maritime service fees” for navigation, environmental protection, and insurance — not a “toll.” Oman, meanwhile, publicly insisted it supports free passage under international law and called the talks constructive. Translation: Iran wants a system that can bill ships; Oman wants to avoid a fight. That makes for an awkward committee.
Why this move is dangerous for shipping and for law
Make no mistake: the Strait of Hormuz is international waterway in practice and, under treaties like UNCLOS, transit passage is protected. If Tehran and Muscat cook up a scheme that forces ships to buy Iran‑approved insurance or pay “fees,” they will clash with international law, the maritime insurance market, and U.S. sanctions rules. Major P&I clubs and reinsurers are wary. The recent Persian Gulf Strait Authority (PGSA) measures from Tehran — including plans for Iran‑approved insurance policies — look a lot like leverage dressed up as regulation. Call it extortion with a press release.
Industry and Washington are already sounding the alarm
Shipowners, insurers and maritime experts have been blunt: no industry underwriter will accept a unilateral Iranian insurance regime unless flag states, major P&I clubs and the International Maritime Organization recognize it. On the political side, President Trump and Secretary of State Marco Rubio have both made clear the United States will not accept tolls or other charges on transit passage. That public pushback matters. Any attempt to force fees would collide with sanctions, private insurers’ compliance rules, and a likely Western naval response. The committee’s remit, membership and timeline are still unknown — which is exactly when bad actors like Iran try to move fastest.
What Washington and partners must do next
Don’t wait to see if the committee produces a binding fee regime. The U.S. should make plain that any extortionate scheme will be illegal, sanctionable, and unenforceable. That means coordinating with allies, warning major P&I clubs and flag states, and backing up diplomacy with clear naval and economic posture so shippers don’t get caught in the middle. Oman can have its voice in talks, and it should. But no committee should be allowed to turn the Strait of Hormuz into a cash register. The world needs free seas, not a subscription plan enforced at gunpoint — and the United States must act like it.
