Oman's recent diplomatic moves with Iran over the future of the Strait of Hormuz have drawn a sharp response from the United States. President Donald Trump has threatened the sultanate with possible airstrikes if Muscat interferes with Washington's plans to maintain pressure on Tehran. The escalation comes as Oman and Iran reportedly finalize a deal that could reshape control and revenue from one of the world's most critical maritime corridors. Proposals for a temporary shipping corridor have also been discussed, including a route reported to be about seven miles wide. Inbound vessels would use Iranian waters, while outbound traffic would cross Iranian and Omani waters.
For decades, Oman has been known as a discreet, reliable mediator in the region, carefully balancing relations with major powers. The current crisis has pushed Muscat toward a more assertive economic stance. The sultanate is negotiating with Tehran to introduce a new system of tariffs for ships passing through the Strait, modeled on practices in other strategic waterways such as the Strait of Malacca. The approach could generate impressive long-term income for both Oman and Iran, since the strait's narrow waters are shared almost equally between the two countries. The reported proposal is part of a wider debate over tolls and transit fees. Discussions about the temporary corridor have also covered shared traffic management and mine clearance.
The Strait's importance is clear from the volume of traffic it normally carries: around 21 million barrels a day of crude oil, condensate and petroleum products, along with roughly 85 commercial vessel crossings on a typical day. Its traffic-separation scheme has inbound and outbound lanes approximately two nautical miles wide, divided by a median zone and running through Iranian and Omani territorial waters. Trump's administration is determined to block any arrangement that might benefit Iran or undermine the ongoing blockade. British media report that Oman has already consulted leading UK law firms specializing in maritime law to find solutions to the impasse. Iran has demanded the right to charge transit fees. Oman argues for open navigation but sees room for service-based charges covering navigation support, traffic management and environmental protection. Such a system would not discriminate against any vessel and could improve safety and services in the corridor.
The legal structure sits at the center of the dispute. Part III of the United Nations Convention on the Law of the Sea (UNCLOS) sets out transit passage through international straits. Article 38 establishes the right for ships and aircraft, while Article 44 says bordering states must not hamper or suspend that passage. The treaty also distinguishes passage itself from services such as navigation assistance or traffic management, which would need separate assessment if charged for. The United States and most other states regard transit passage through Hormuz as non-suspendable. Iran disputes aspects of that interpretation and emphasizes its own territorial-sea laws. The structure is set out in the UNCLOS rules on straits.
Muscat is also seeking backing from other Gulf states while trying to avoid friction with its Arab neighbors. Recent signals from Saudi Arabia suggest it may accept a deal if it restores normal hydrocarbon exports and eases the region's economic strain. The US remains opposed, viewing Oman's initiative as a challenge to its strategy of isolating Iran. The economic effects of the conflict are already being felt globally, with higher energy prices and inflation affecting many countries, including Spain, where energy imports are a basic concern.
Sultan Haithan Bin Tarik is driving Oman's current policy. He succeeded his cousin Qaboos in 2020 and has continued his predecessor's tradition of diplomatic agility, maintaining relations with varied actors, including the Houthi rebels in Yemen, Iran, Gulf monarchies, Israel, the US and Russia. Oman exports around 800,000 barrels of oil daily, but is less wealthy than its neighbors. It is pursuing economic diversification through its Vision 2040 plan, which focuses on logistics, tourism and agriculture.
Experts say a new revenue stream from Hormuz tariffs could give Oman a much-needed boost. Often called the 'Switzerland of the Middle East' for its neutrality, the country has so far avoided the worst effects of the regional conflict because its basic oil ports are outside the strait. So, Oman has sidestepped the severe financial difficulties faced by other Gulf Cooperation Council members.
In recent weeks, Sultan Haithan has stepped up diplomatic efforts, meeting leaders in Abu Dhabi and Doha to build consensus among Gulf monarchs. Described locally as 'fraternal,' the visits reflect a shared desire to resolve the Hormuz crisis. Skepticism is growing in the region about Trump's ability to deliver a solution, especially as the blockade continues to strain economies and disrupt energy flows.
Oman's diplomatic outreach has reached beyond the Gulf. On June 29, Sultan Haithan made a rare visit to France, the first by an Omani ruler in four decades. The trip was officially focused on the economy, but discussions with President Macron centered on the Iranian crisis and the future of the Strait of Hormuz. French officials expressed concern about the precedent a potential Oman-Iran agreement could set. Muscat insists its proposal is the only viable path out of the current deadlock.
The standoff over the Strait of Hormuz is not the only recent regional tension drawing international attention. The ongoing crisis in Ceuta has also highlighted the complexities of diplomatic negotiations and the challenges facing local authorities, as detailed in a recent report on Ceuta's political standoff.
The situation in the Strait of Hormuz remains fluid, and Oman's balancing act is under intense scrutiny. The negotiations could have impressive implications for the Gulf and global energy markets, as well as for countries such as Spain that rely on stable maritime trade routes. The risk of further escalation remains as the region waits for a breakthrough.
