Iran in talks with Oman over permanent toll system for Hormuz
Iran refuses to reopen the Strait of Hormuz until the US agrees to lift its naval blockade of Iranian ports
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IRAN is discussing with Oman how to set up some form of a permanent toll system that will formalise its control of maritime traffic through the Strait of Hormuz.
“Iran and Oman must mobilise all their resources both to provide security services and to manage navigation in the most appropriate manner,” the Iranian ambassador to France, Mohammad Amin-Nejad, said in an interview with Bloomberg in Paris on Wednesday.
“This will entail costs, and it goes without saying that those who wish to benefit from this traffic must also pay their share,” he said in Farsi, through an interpreter, adding that the system will be transparent. “And if today there is any desire for the situation to improve, a solution must be found to tackle the root of the problem.”
Oman’s government didn’t immediately respond to a request for comment.
Iran’s unprecedented closure of the strait is the biggest consequence of the US-Israeli war on the Islamic Republic. Traffic has shrivelled since the conflict erupted in late February, with Iran letting through few vessels and the US blockading Iranian ports. That’s caused energy prices to soar and sparked a global selloff of government bonds as inflationary pressures mount.
Situated between Iran to its north and Oman to the south, the strait connects the Persian Gulf to the Indian Ocean and normally handles a fifth of the world’s oil and liquefied natural gas supplies, as well as other commodities such as aluminum and fertilisers.
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Iran refuses to reopen the Strait of Hormuz until the US agrees to lift its naval blockade of Iranian ports. Amin-Nejad insisted that traffic hasn’t been completely interrupted and Iran has claimed, without giving evidence, that 26 tankers and other ships transited between Tuesday and Wednesday with the help of the Islamic Revolutionary Guard Corps.
That would be an unusually high number for recent weeks, but still far below pre-war levels of roughly 135 ships a day.
Amin-Nejad blamed exorbitant insurance costs for the decline, though shipping companies say the risk of missile and drone attacks, as well as hitting sea mines, is the main problem. Most say they won’t send vessels through the strait until the war’s over.
Iran and the US agreed to a fragile ceasefire on April 8 and are exchanging messages via Pakistan about a peace deal. The warring sides still seem far apart and have both said in recent days they’re prepared to resume hostilities.
The Hormuz strait is a key sticking point, with the US, Europe and Gulf Arab states such as Saudi Arabia saying Iran cannot have control over a chokepoint that has always been treated like international waters.
Now, Iran has expanded its claimed area of jurisdiction and set out new rules for vessels seeking to transit the waterway, which is roughly 39 km wide at the narrowest point.
That involves seafarers dealing with a new body called the Persian Gulf Strait Authority and sometimes getting payment requests of as much as US$2 million for safe passage.
Iran says countries including China and South Korea have coordinated with the IRGC’s navy to get their vessels through. Neither country has confirmed that and Iran hasn’t said if they were charged.
Teheran has signalled it will keep control over Hormuz even after the war, to deter future attacks from the US and Israel. It could also be a means of raising revenue for the war-ravaged economy.
President Donald Trump has gone from suggesting the US itself could start charging fees to telling Iran it “better not be” thinking of tolls. At one point, he even said there could be a US-Iran joint venture for the strait.
The head of the United Arab Emirates’ main oil company underscored the concerns of Iran’s Arab neighbours when he said a “dangerous precedent” was being set with Hormuz.
“Once you accept that a single country can hold the world’s most important waterway hostage, freedom of navigation as we know it is finished,” Sultan Al Jaber said on Wednesday. “If we do not defend this principle today, we will spend the next decade defending against the consequences.”
Amin-Nejad downplayed tensions with the UAE and Saudi Arabia. The countries conducted separate, covert attacks against Iran before the ceasefire, Bloomberg reported. Those were in response to Iran firing thousands of drones and missiles at them and other states such as Qatar and Bahrain.
“The most painful or difficult moments for us were those when we had no choice but to attack military bases located on the soil of those countries, from which Iranian territory was being attacked,” Amin-Nejad said, adding that “accumulated misunderstandings” could be easily solved once the war stops.
Many of Iran’s projectiles targeted civilian areas and non-military sites such as ports and oil refineries.
The ambassador said the US underestimated Iran’s resilience.
“Their analysis was based on the belief that by putting pressure on the Iranian people, through sanctions and a sort of total embargo, they would be able to completely resolve the issue within three or four days,” he said.
“They imagined that Iran was a second Venezuela,” a reference to the capture of Venezuelan President Nicolas Maduro in January. BLOOMBERG
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