Iran and Oman swap proposals to manage Strait of Hormuz: What we know 

Iran has rejected a proposal from Oman for the countries’ joint oversight of the critical Strait of Hormuz and has, instead, made a proposal of its own as both sides continue to pore over the terms of what a final agreement could look like.

Iran’s Deputy Foreign Minister Kazem Gharibabadi said in a state broadcast on Tuesday that Oman’s proposal had not sufficiently addressed Tehran’s concerns about control of the strait.

He added that Iran’s counterproposal would give Tehran more control over the waterway.

The narrow strait has been at the centre of the conflict between the United States and Iran since late February, when US-Israeli attacks began on Iran. Before the war, about one-fifth of the world’s oil and liquefied natural gas (LNG) supplies were shipped from Gulf producers via this route. Shortly after the war began, Tehran closed the strait, triggering global supply challenges. The US later imposed its own, corresponding blockade on Iranian ports.

Following a memorandum of understanding (MoU) signed by Iran and the US on June 17, the strait was supposed to be reopened to shipping, without charge, for at least 60 days. However, the vague wording of the MoU has caused considerable disagreements over who has ultimate control over the waterway – which passes through the territorial waters of Iran and Oman – and which routes ships should take.

That led to the renewal of US attacks on Iran and retaliatory Iranian strikes on US military assets and infrastructure in the region. While that fighting was halted at the end of last week, diplomatic wrangling over the fate of the strait continues.

Here’s what we know about what Iran and Oman have now proposed for the strait:

What does Oman want?

Gharibabadi revealed in the Iranian state broadcast that Muscat had suggested a joint regional mechanism that would see both countries control the strait in a 50-50 split.

The proposal would see Iran control transit lanes on its side of the strait, while Oman would control lanes running along its coast.

“Oman proposed to us the creation of a route in the Strait of Hormuz, with 50 percent of it located in our territorial waters and 50 percent in Omani territorial waters. The route for ships to pass through the Strait of Hormuz could involve entering through our waters and exiting through Omani territorial waters,” Gharibabadi told state TV.

Additionally, the proposal suggested “voluntary fees” from shipping vessels that would go to both countries.

Oman’s proposal appears to be modelled on an agreement governing the Strait of Malacca, which connects the Indian and Pacific oceans. In that arrangement, Indonesia, Malaysia and Singapore ask ships transiting the strait to voluntarily contribute to fund navigation, environmental protection, and ‌search-and-rescue operations.

Oman’s proposal also appears to be backed by regional countries. The Gulf Cooperation Council (GCC) foreign ministers held a meeting on Tuesday to further discuss regional security, Qatar’s Ministry of Foreign Affairs said.

But Gharibabadi said Iran ultimately rejected the proposal based on its own national security concerns.

What does Iran want?

Gharibabadi said Tehran’s counterproposal would see Iran manage shipping through its side of ‌the strait, with Muscat managing part – but not all – of the opposite lane.

“Our proposal is for one route to lie entirely within the territorial waters of the Islamic Republic of Iran, with part of the other route also passing through Iranian territorial waters, so that Iran can effectively exercise oversight over both inbound and outbound traffic,” Gharibabadi said.

Gharibabadi warned that the strait will remain closed if Oman rejects the plan. He also warned that the Strait of Hormuz could not return to pre-war arrangements when ships passed without paying any form of toll.

Al Jazeera’s Resul Serdar Atas reported from Tehran that Oman is now considering yet another proposal that could include three routes for maritime traffic: One running through Iran’s territorial waters, an international lane, and a third running through Omani waters.

It’s unclear how Tehran will react to this. “Our sources tell us Iran is demonstrating some flexibility,” Serdar reported.

What else is being debated?

Other points of contention include the direction or trajectory of passing ships in the lanes, fees to be collected, who will define any arrangements agreed upon, and mine clearance operations in the strait, Al Jazeera’s Tohid Asadi reported from Tehran.

While the US has accused Tehran of placing mines in the strait, Tehran has not confirmed this. However, the Islamic Revolutionary Guard Corps did issue a map of a permitted route for approved shipping in April as the war was ongoing, stating that it would ensure ships avoided any potential mines. That route took ships much closer to the coast of Iran than previously.

Another clear issue is over fees for using the strait and how much Iran wishes to tax ships, as opposed to how much voluntary contributions could bring in.

Paul Musgrave, a professor at Georgetown University in Qatar, noted the Strait of Malacca model raises about $70m annually through its own voluntary fees system.

However, that is a far cry from the $1m per ship that’s reportedly been proposed by Tehran as a “service fee” in the Strait of Hormuz.

Tehran has in the past said shipping fees would go towards reconstruction following widespread infrastructure damage caused by US-Israel attacks.