Oman has handed Iran a Gulf-backed proposal that would let ships pay voluntary fees to use the Strait of Hormuz, rather than the mandatory charges Tehran has been pushing for since the waterway was disrupted by war.
A Gulf source and a Western diplomat told Reuters the plan was submitted on Tuesday, though a senior Iranian source said Tehran had not yet responded.
The proposal is designed to end months of disruption to a route that carried around a fifth of the world's oil and liquefied natural gas. It comes days after President Donald Trump abruptly halted a fresh two-week US bombing campaign against Iran, raising hopes that shipping through the strait could return to something closer to normal.
How the Malacca Model Could Resolve the Hormuz Standoff
Oman's plan borrows from the Strait of Malacca, the shipping lane between Malaysia, Indonesia and Singapore. There, littoral states do not charge ships for passage but instead invite voluntary contributions towards navigation, environmental protection and search-and-rescue costs.
Singapore's Maritime and Port Authority has previously stressed that under the UN Convention on the Law of the Sea, the right of transit passage 'cannot be impeded'. The three Malacca states 'do not impose fees, tolls, or any form of payment on ships' exercising that right, funding upkeep instead through a voluntary Aids to Navigation Fund backed by groups such as The Nippon Foundation.
A Western diplomat briefed on the Hormuz plan compared it to a voluntary carbon offset on a plane ticket, something buyers can opt into rather than a compulsory charge.
BREAKING: Oman has presented a proposal to Iran for a joint regional mechanism to manage the Strait of Hormuz with voluntary fees, a Gulf source told Reuters on Tuesday.
— The Hormuz Report (@HormuzReport) July 28, 2026
Under the Omani proposal, which has regional backing, Iran would not exercise sole control of the vital…
Why Iran and Washington Are Still at Odds Over the Omani Proposal
Iran has said it wants to manage the strait jointly with Oman, which sits on the opposite shore, and to charge ships for using it. Washington rejects mandatory fees as illegal and wants shipping to return to the pre-war status quo, when vessels passed freely.
Under the Omani proposal, Iran would not have sole control of the strait, and fees would not be compulsory. Iran's joint military command has separately rejected a Trump-backed plan to pay for vessel damages out of frozen Iranian assets, warning that any firm accepting such payments would be denied passage.
Trump, speaking to Fox News ahead of talks with Israeli Prime Minister Benjamin Netanyahu, said the US was 'in a strong position right now' and warned strikes could resume if Iran does not agree a deal. He pointed to the scale of damage already inflicted, saying 'about 91 million people without power, without bridges, would have to live... it's a very, very delicate balance'.
The US president repeated a threat against Iran's underground Pickaxe Mountain facility, saying 'if we don't make a deal we'll take it out very easily.'
What It Means for Drivers
Oil markets have already reacted. Brent crude fell around 8 per cent on Monday and continued sliding on Tuesday to close to $87 a barrel, as fears of a fresh shipping shutdown eased.
Lower crude prices tend to filter through to pump prices worldwide within one to four weeks, though the effect is not instant and varies by country depending on local taxes and currency movements. In the UK, petrol averaged 149.80p a litre in the week to 6 July, continuing a gradual decline from highs seen earlier in the year when the conflict first disrupted Hormuz shipping. Drivers across Europe, Asia and North America have seen similar relief as crude prices have eased.
If Oman's plan succeeds in stabilising the strait, energy analysts say that downward pressure on pump prices is likely to continue globally. However, a resumption of US strikes could just as quickly send prices climbing again for drivers everywhere.
The Strait of Hormuz carries roughly a fifth of the world's oil and gas; any deal over how ships pass through it has knock-on effects far beyond the Gulf, from fuel bills on forecourts worldwide to global shipping insurance costs. A voluntary fee system would be a significant climbdown from Iran's original demand for mandatory payments, but it still requires Tehran's agreement. Trump's repeated threats to resume strikes mean the situation could shift again within days.
