European nations now believe some Hormuz fees are inevitable
The possibility of some sort of service fee following the US and Israel’s war against the Islamic Republic was described as a proposal made by two people who asked not to be named during private conversations.
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They have said privately that some Gulf Arab officials have the same view, but this may not be their government’s official position.
It’s unclear what type or how much of a fee any given country would be willing to accept. Meanwhile, the United States and Gulf Arab states continue to insist that Iran and Oman cannot place any blame for the Strait of Hormuz. Concerns include adherence to international maritime law and the risk that it could set a precedent for other countries to impose fees on different waterways.
While accepting the idea of additional costs, European countries are pressuring Iranian and Omani officials not to discriminate against ships based on their nationality, the sources said. Britain, France and other European countries are also pushing for an international naval coalition to help demine Hormuz, but its deployment will depend on negotiations on progressing a permanent peace deal.
Also Read | No immediate shelter from storms: What protected India’s oil supplies during the Hormuz crisisOman, Saudi Arabia, the United Arab Emirates, Qatar and Kuwait either declined to comment or did not respond to Bloomberg’s requests for comment.
BloombergThe Bahraini government said in a statement that it did not accept any fees or tolls from ships passing through the strait, nor did it even indicate that it accepted them.
Bahrain said, “The free and unhindered passage of international maritime transport through the strait is a matter of international law, not a matter of negotiation.”
Oman tells European officials return to pre-war status quo in Strait of Hormuz not possible, Bloomberg reported last week. Ships passing through the waterway, which is a critical transit point for energy supplies from the Gulf, may be charged for services related to removing pollution of the strait and navigation costs.
Oman, an ally of both the West and Iran, faces pressure from both sides. The sultanate, which borders the southern part of the strait, has said it will always comply with international maritime law, although it has publicly sent mixed messages about what to do.
One of the sources said Oman was examining the Malacca Strait in Asia as a potential model, a sign that the country was trying to find a solution that would satisfy Iran and the rest of the world. Omani leaders think a Malacca-style system will only work if all Persian Gulf states agree to it, the person said. It is unclear whether a voluntary system would be a viable option for Iran.
The Strait of Malacca is loosely governed between Indonesia, Malaysia and Singapore, and these countries charge ships for any navigation and security services needed. There is a fund that collects voluntary contributions for safe navigation, but it does not regularly publish details of financial contributions. In 2017, Singapore announced that $22 million had been raised for the fund over a 10-year period, or about $2.2 million per year.
Commercial shipping through the Strait of Hormuz has increased since Iran and the United States signed an interim peace agreement nearly two weeks ago. That agreement, along with American military support for the ships, increased the flow of oil through the narrow gorge from countries such as Saudi Arabia to more than 10 million barrels a day, just over half pre-war levels. Iran also increased its crude oil exports thanks to the US lifting the embargo on its ports.
In a rare visit to Europe last week, Oman’s Sultan Haitham bin Tariq talked about plans for the Strait of Hormuz during a meeting with French President Emmanuel Macron in Paris. The two leaders said in a joint declaration that they would encourage unrestricted transition.
Sources said that the Gulf countries, which were subjected to heavy attacks from Iran for weeks in the first phase of the war, expressed their willingness to soften their reluctance to pay tolls in order to reduce tensions.
The ongoing discussions between Iran, Oman and their neighbors over the Strait of Hormuz come as US negotiators Steve Witkoff and Jared Kushner travel to Doha this week to take part in indirect talks between Washington and Tehran. They were trying to improve the interim agreement, which triggered a 60-day negotiation period to resolve issues such as Iran’s nuclear program and billions of dollars in frozen funds.
Those efforts faced a rocky start after a series of clashes over Hormuz late last week, as well as disputes over the future management of the waterway. Before the conflict, approximately one-fifth of the world’s oil and liquefied natural gas resources flowed through the strait.
US President Donald Trump said on Wednesday that negotiators were making progress and said “we are getting along very well.”
The Islamic Republic effectively blocked the waterway at the beginning of US and Israeli bombardment in late February, and the US also prevented Iranian ships from reaching ports.
This led to an increase in energy prices and a supply shortage. Since the beginning of the war, Iran has demanded some form of future control of traffic through the strait.
