Iran has rejected Oman's proposal for joint oversight of the Strait of Hormuz and put forward a counterproposal that would place key shipping routes more fully within Iranian territorial waters, according to Deputy Foreign Minister Kazem Gharibabadi, who outlined Tehran's position on Iranian state TV on or around July 28, 2026 (Al Jazeera).

Gharibabadi said Oman's proposal did not adequately address Tehran's concerns about control of the strait. Oman had suggested a 50-50 split: Iran would manage transit lanes in its territorial waters, and Oman would manage lanes in its own. The Omani plan also included voluntary fees from shipping vessels, with revenue going to both countries. It was modeled on the Strait of Malacca agreement, in which Indonesia, Malaysia, and Singapore ask ships to voluntarily contribute to fund navigation aids, environmental protection, and search-and-rescue operations.

Iran's counterproposal would place one shipping route entirely within Iranian territorial waters, with part of the opposite route also passing through Iranian territory. The Strait of Hormuz, a narrow waterway between Iran and Oman through which roughly one-fifth of the world's oil and liquefied natural gas supplies passed before the war, cuts through the territorial waters of both countries. Technical talks between Iran and Oman were held on July 26, 2026, according to Iran's Ministry of Foreign Affairs (Iran MFA).

Reuters reported that Gulf states support Oman's proposal for a joint mechanism with Iran to manage the strait through voluntary user fees (Israel National News. GCC foreign ministers held a meeting on July 28, 2026, to discuss regional security, according to Qatar's Ministry of Foreign Affairs. Oman's foreign ministry had reaffirmed cooperation to restore freedom of navigation in the strait as recently as July 14, 2026, and had previously published content on June 24 about working with the International Maritime Organization to establish a transit corridor for vessels.

The proposal exchange comes after a brief but destructive escalation in the US-Iran conflict that began in late February 2026, when US-Israeli attacks on Iran prompted Tehran to close the Strait of Hormuz shortly after the war began. The US then imposed its own blockade on Iranian ports.

Iran and the United States signed a memorandum of understanding on June 17, 2026, under which the strait was to be reopened to shipping without charge for at least 60 days. Disagreements over the MoU's vague wording about ultimate control of the strait led to renewed US attacks on Iran and retaliatory Iranian strikes. The fighting was halted in the week before July 29, though diplomatic wrangling over the strait's governance continued.

The closure's consequences rippled outward in stages. In April, Iran offered to reopen the strait conditional on the United States lifting its blockade (AP News), while Iran's parliament speaker said Tehran would not reopen it as long as the US naval blockade remained in place (Al Jazeera). On July 15, Iran fired on three commercial ships passing through the strait because those vessels had used a shipping route not approved by Iran (Al Jazeera). Separately, Al Jazeera reported in April that Iran and China were seeking to boost the status of the Chinese currency in strait-related transactions, taking aim at US dollar dominance (Al Jazeera).

The structural difference between the two proposals is stark. Oman's framework draws on an established multilateral precedent: the Strait of Malacca scheme is cooperative, voluntary, and distributes oversight among the three littoral states in proportion to their territorial waters. Iran's counterproposal, by contrast, seeks to maximize the portion of transit routes falling under Iranian jurisdiction, which would give Tehran unilateral authority over the primary shipping lane and partial authority over the opposite route.

For Gulf states, the Omani model offers a path back to predictable commercial flows without conceding control to any single power. For Iran, the counterproposal reflects a preference for direct sovereign control over a chokepoint it views as essential to its leverage. The MoU's collapse over ambiguous language about "ultimate control" previewed precisely this fault line, and both proposals now sit as the latest, more detailed articulations of positions that have already proven difficult to reconcile.

The broader context here is a race against the next escalation cycle. The 60-day window from the June 17 MoU has not formally expired, but the MoU itself was effectively nullified by the renewed hostilities it was meant to prevent. The GCC meeting on July 28 signals that Gulf states are looking for a durable framework before tensions rise again. Gharibabadi's public rejection of the Omani plan on the eve of that meeting, however, suggests the diplomatic distance remaining is considerable, and whether Oman can bridge the gap between a Gulf-backed, fee-based multilateral model and Iran's insistence on maximal territorial jurisdiction is very much an open question.