Iran and Oman are reportedly close to finalizing an agreement that would establish a new framework for managing shipping traffic through the Strait of Hormuz, potentially ending decades of unrestricted free navigation through one of the world's most critical maritime chokepoints. Roughly 20% of the world's daily oil consumption passes through the strait, making any change to its governance a matter of immediate global economic significance.

According to reports, the proposed arrangement would place vessel movements through the strategic waterway under joint Iranian-Omani supervision, with no direct US involvement. If implemented, the deal would represent a significant departure from the Strait's long-standing status as an international waterway open to all commercial and military vessels without restriction. Under the United Nations Convention on the Law of the Sea (UNCLOS), straits used for international navigation are subject to a regime of transit passage that cannot be suspended by bordering states—a legal principle the proposed framework would appear to test.

Under the proposed plan, ships entering the Persian Gulf would travel through the northern shipping lane along Iran's coastline, while vessels exiting the Gulf would use the southern lane near Oman. The strait is approximately 21 miles wide at its narrowest point, with shipping lanes in both directions only about two miles wide each. This arrangement would effectively divide operational responsibilities between Tehran and Muscat, creating a new bilateral management structure for maritime traffic through the strait.

A senior Iranian source told Reuters that Tehran would exercise full control over inbound shipping. Under the framework, vessels entering the Gulf would require Iranian clearance, while outbound traffic would be managed by Oman following notification to Iranian authorities. The source characterized the proposal as a temporary measure designed to restore commercial flows while maintaining security oversight following the recent conflict. Iran has periodically threatened to close the strait during past periods of heightened tension and has seized commercial vessels in and around the waterway on multiple occasions, making the formalization of any oversight role a sensitive issue for Gulf states and global shipping insurers.

The plan also includes a financial component. Iranian officials reportedly stated that Tehran does not intend to impose formal transit tolls but would instead collect what it describes as "service fees" related to security and environmental protection for oil tankers transiting the waterway. Revenue from these payments would be shared equally between Iran and Oman.

A US official rejected assertions that ships would need Iranian approval to transit the strait and denied that any arrangement involving payments to Tehran had been accepted. The disagreement underscores the substantial gap between US and Iranian positions on the future governance of the waterway. The US Fifth Fleet, headquartered in Bahrain, has for decades helped secure commercial shipping through the strait and across the broader Gulf region.

US Secretary of State Marco Rubio has publicly warned against any agreement that does not fully restore the Strait of Hormuz as an open international passage. Rubio argued that permitting a single country to control access to an international waterway, impose fees on transit, and condition navigation rights on political approval would establish a dangerous precedent with potential replication at other chokepoints worldwide. Major Asian economies including China, Japan, South Korea, and India depend heavily on Gulf crude transiting the strait and would be directly affected by any new transit requirements.

A framework for reopening the strait could reduce the immediate risk of supply disruptions and support the normalization of shipping activity. However, the prospect of Iran gaining a formal role in supervising traffic through the chokepoint is likely to remain a persistent source of geopolitical tension, particularly given strong opposition from the United States and its allies.

In the near term, oil price movements will continue to be driven by US-Iran developments, as uncertainty surrounding ongoing talks and the possibility of weekend military strikes continues to support prices.