Oman should embrace the Gulf, America and freedom — not Iran’s toll scheme

In the maelstrom of noise over Iran’s action in the Strait of Hormuz, there has been much less discussion about the country on the other side of the disputed waterway: Oman.

Oman has been a mysterious actor throughout the conflict in Iran. While he cooperated with the United States as a mediator, he also showed openness to Tehran’s plans to impose fees on ships passing through the Bosphorus.

This would be a significant mistake. Unlike Iran, Oman has a bright and promising future due to recent effective economic reforms and the opportunity to participate in the growing regional alignment against the Islamic Republic. For the sake of the Omani people, Muscat must embrace this path to greater freedom, opportunity and prosperity.

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There are many reasons why rapprochement with Iran makes no sense for Oman, despite the coincidence of geography that positions them on both sides of the Bosphorus. In the 2026 edition of The Heritage Foundation Index of Economic FreedomOman, an annual benchmarking report comparing the entrepreneurial competitiveness and resilience environments of countries around the world, has made a big splash, scoring second best behind Javier Milei’s Argentina and rising an impressive 19 places to 39th globally.

This transformative progress reflects the country’s continued economic expansion and strength under the Oman Vision 2040 framework. Fiscal consolidation and more effective management of public finances helped reduce the debt level to below 40 percent of GDP. Legal reforms focused on ensuring greater transparency and accountability have effectively combated corruption.

Additionally, the opening of businesses in Oman to more foreign investment has also contributed to the country’s success. As a result, the International Monetary Fund Estimates Oman’s GDP $21,645 per person, a nineteen percent increase from 2025.

This happy situation cannot be beyond the catastrophic economic dysfunction that has emerged in Iran. Although Iran’s economy has the world’s second-largest proven oil reserves (excluding significant natural gas reserves), it was in complicated freefall even before Operation Epic Rage, due to the regime’s systemic mismanagement. Things are much worse now.

A decade ago, inflation was around 7% after Barak Obama’s JCPOA gave Tehran an economic lifeline. Currently, this rate is around 50%, and food prices are close to 100%. Poverty levels have increased significantly and millions more are predicted to fall into poverty in the coming months. Official estimates put unemployment at around 10 percent, but independent assessments suggest it is over 25 percent, with the brunt of job losses falling on young people. As a result, Iran’s GDP per capita is a dismal $3,415; It is less than half that of Oman and down six percent from 2025.

All of this makes Oman’s recent evasions on Iran confusing. The two countries recently held high-level talks in Muscat to assert their shared sovereignty over the waterway and thus their ability to demand payment for ships’ passage. The reality, embellished with diplomatic language such as security and environmental fees in official statements, is a state-sponsored blackmail applied to vital energy flows from the Gulf.

While such money-making schemes are understandable for an increasingly impoverished and desperate Iran, they fall short of Oman’s expectations. Rather than teaming up with a global pariah and risking US economic sanctions or even military strikes, Muscat should build on the hard work it has already done to transform its economy for a greater future.

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The next pragmatic step should be to further embrace the principle of economic freedom by offering passage on their side of the Bosphorus free from Iranian threats; This will only increase the attractiveness of their ports as ports of call for everything from international tankers from Gulf states to U.S. Navy ships. Oman could also be an integral part of the regional race to build alternative infrastructure around the Bosphorus, which would eventually and inevitably leave Iran exposed.

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Attempting to do business with Iran to impose restrictions and taxes on Hormuz would fatally undermine this opportunity for Oman, and Oman, along with Iran, could become isolated from the rest of the region. The recent show of unity by the Gulf Cooperation Committee (GCC) in Bahrain with Secretary of State Marco Rubio offers a much better alternative for Oman.

Rather than being Tehran’s junior partner, Muscat has a unique geoeconomic opportunity to cooperate with much more productive and prosperous regional partners, along with the United States, for the greater good. Now is the time for Oman to seize this moment and secure its transformational trajectory.

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