Oman and Iran strike Hormuz deal as 20M barrels transit strait

Oman and Iran agreed Monday to develop a navigation management and fee system for the Strait of Hormuz, asserting territorial sovereignty over the waterway where about 20 million barrels of crude transited over the past weekend — the fastest pace since the war began.

"Both sides are committed to ensuring safe passage while affirming their sovereign rights over territorial waters in the strait," the joint statement said, following a meeting in Muscat between Omani and Iranian officials.

The two countries will draft separate agreements covering navigation management and fees and services for the strait, with plans to hold consultations with other coastal states in the region. Tanker-tracking data compiled by Bloomberg showed vessels hauling roughly 20 million barrels of crude passed through the waterway between Friday and Sunday, the highest transparent flow since before the war began in late February. Iran itself pushed 6 million barrels through during the same period.

The Strait of Hormuz handles about a fifth of the world's oil supply, making any disruption to its operation a direct threat to global energy prices and inflation. The bilateral framework between Oman and Iran — which border opposite sides of the strait — could reshape how the waterway is governed, with potential tolls and service fees that maritime legal experts say would violate long-standing principles of free navigation under the UN Convention on the Law of the Sea.

The Muscat agreement follows the broader US-Iran interim deal reached at the Swiss summit, where both sides agreed to a 60-day negotiating window for a final settlement. Under that provisional framework, Iran was granted temporary management of the strait while discussions with Oman and six other Gulf states were to define its future administration. Iran agreed not to charge tolls during the 60-day period.

Tolls, Sanctions and Legal Hurdles

The joint statement did not specify when the new fee and navigation agreements would take effect or whether they would supersede the temporary toll-free arrangement. The Persian Gulf Strait Authority, established by Iran last month to collect payments from transiting vessels, has said it still expects ships to register with the authority, though the US Treasury imposed sanctions on the entity late last month.

President Donald Trump has suggested the US could impose its own tolls on strait crossings if a final deal with Iran is not reached within the 60-day window, describing the US as the "Guardian Angel to the countries of the Middle East." The administration has not provided details on how such charges would be applied.

The last time Iran asserted direct control over strait passage was in early April, when it demanded tolls as a precondition for relinquishing its chokehold — a move that shipping analysts dubbed the "tollbooth." That standoff preceded the current interim deal and contributed to a sharp reduction in traffic, with daily crossings falling to about 35 vessels from a pre-war average of 100 to 130.

With technical teams from both sides remaining in Switzerland to finalize implementation details, the next milestone is the joint framework text expected from Qatar and Pakistan. If the 60-day negotiations fail to produce a final agreement, the temporary toll-free arrangement expires, leaving the strait's governance — and the cost of transiting it — in limbo.

This article is for informational purposes only and does not constitute investment advice.