Oman Rejects Strait of Hormuz Transit Fees: What Badr al-Busaidi Said and the Malacca Model Alternative

In late June 2026, as the Strait of Hormuz crisis deepened following the U.S.-Iran framework deal and renewed IRGC threats, Oman's Foreign Minister Sayyid Badr bin Hamad Al Busaidi delivered a clear and definitive position: no compulsory transit fees. His statements, made at a June 25 GCC-U.S. meeting in Manama and in subsequent interviews, rejected Iran's pricing push and proposed a compromise voluntary system rooted in existing international maritime law.

The Core Rejection: 'No Transit Fees'

Speaking on June 25 at a joint ministerial meeting in Manama, Bahrain, attended by U.S. Secretary of State Marco Rubio and Gulf foreign ministers, Busaidi stated unequivocally that "future arrangements for managing the Strait of Hormuz would not involve the imposition of transit fees" . The Omani government separately declared that transit fees are "internationally prohibited" under the Law of the Sea .

The timing was significant: the statement came just two days after Iran and Oman had signed a joint statement agreeing to "study the costs to be charged for services provided in administering the Strait of Hormuz" , and one day after Iran rejected a UN-backed Omani plan to evacuate trapped ships . Busaidi's Manama declaration drew a clear line between Muscat and Tehran's interpretation of that joint agreement.

The Voluntary Alternative: A Malacca Strait Model

Instead of compulsory tolls, Oman proposed a voluntary fee system modeled on the mechanism that governs passage through the Strait of Malacca in Southeast Asia . Under this compromise plan, energy-importing states and shipping companies would be asked to pay a small, non-compulsory contribution for navigational aids and services rather than mandatory transit tolls. The proposal gives Oman and Iran access to a new revenue stream while remaining within international maritime law .

Muscat also opened a temporary maritime corridor in coordination with the International Maritime Organization (IMO) on June 24, reaffirming its commitment to free and safe passage under the Law of the Sea . The Omani statement emphasized that passage through this corridor would be "without the imposition of transit fees," directly cutting against Iran's effort to portray the strait as a space for joint management and mandatory costs .

The Critical Distinction: Fees vs. Maritime Services

Busaidi drew a sharp legal line between compulsory transit fees and voluntary maritime service costs. He clarified that discussions with Iran concern voluntary maritime services—such as pilotage, navigation aids, and traffic management—rather than compulsory passage charges .

The June 23 joint Iran-Oman statement said the two countries would "study the costs to be charged for services provided in administering the Strait of Hormuz" . Oman has since insisted this means optional service recovery, not transit tolls . As Busaidi told The Guardian on June 29: "We do not support imposing tolls on passage through the Strait of Hormuz, which is internationally prohibited—whereas service fees are permissible, and discussions are currently underway with the Iranian side regarding them" .

Iran's Warning to Oman: Velayati's Rebuke

Ali Akbar Velayati, a senior adviser to Iran's Supreme Leader, issued escalating warnings through late June that were widely interpreted as a direct rebuke to Oman for breaking with Iran's pricing push.

• On June 6, he argued that Iran's growing power had "forced" the U.S. to seek a deal and that "the West's long-feared nightmare has materialized" .
• On June 8, he warned that the "Resistance has the capability to lock both the Strait of Hormuz and Bab al-Mandeb" .
• Most pointedly on June 26, Velayati posted on X that Arab states along the Persian Gulf—including Oman—"owed their stability to Iran's management of the Strait of Hormuz" and criticized the joint U.S.-GCC statement from the Manama meetings .

While these remarks were directed at Arab Gulf states broadly, analysts noted that Oman was the primary target given its recent diplomatic departure from Iran's position.

First Meeting of the Iran-Oman Joint Hormuz Committee

On June 29, 2026, Iran's Deputy Foreign Minister Kazem Gharibabadi and Oman's Minister of State for Foreign Affairs Abdulaziz al-Hinai held the first meeting of the 'Hormuz Joint Committee' in Muscat . Gharibabadi said they "exchanged views on the implementation of the provisions of the joint statement about the new management of the Strait of Hormuz," but stressed that the "first round of technical talks" would take place only when all conditions were met, with date and venue to be agreed .

The committee was first agreed on June 23 during a visit by Iranian Foreign Minister Araghchi and Parliament Speaker Ghalibaf to Muscat . The Institute for the Study of War (ISW) warned that this mechanism could enable Iran to "regulate transit through the strait and decide to restrict passage at its discretion" .

Broader Context: U.S.-Iran Deal, GCC Opposition, and Doha Talks

Oman's position cannot be understood in isolation. The broader geopolitical landscape in late June 2026 included:

• U.S.-Iran framework deal: On June 17, President Trump and Iranian President Pezeshkian signed a memorandum of understanding to end hostilities and reopen the strait . Oman voiced support for this deal and said future transit would be fee-free .
• GCC opposition: At the Manama meeting on June 25, U.S. Secretary of State Marco Rubio and GCC foreign ministers issued a joint statement opposing any tolls in the strait, which Velayati then attacked .
• Iran rejects UN-backed plan: On June 25, Iran rejected a UN-backed Omani plan to evacuate trapped ships, calling it a first phase of broader Omani management proposals .
• Doha talks: Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al-Thani visited Muscat on June 24 to initiate negotiations involving Iran, Iraq, and Gulf Arab states on the future of Hormuz operations, with Gulf states expected to push for no tolls . The planned Doha talks are seen as the next venue for multilateral discussions on the strait's governance.
• Ongoing Iranian actions: The IRGC continued to attack and threaten vessels to advance its objective of establishing long-term control over the waterway .