How To End The Tussle Over Hormuz Strait: Is Britain, Oman Floating A Not So Straight Proposal

A proposal to find a lasting solution to the stalemate between the US and Iran over control of the Strait of Hormuz is being floated by Britain, policy wonks and Oman.

The proposal could allow navigation fees to be charged in the Strait of Hormuz, with a rider.

The transit fees would not be compulsory and would have to have the backing of International Maritime Organization (IMO), the United Nations agency that regulates maritime transport, The Guardian reported.

The IMO, headquartered in London, is tasked with enforcing global rules to make international shipping safe and secure.

Interestingly, Britain is reportedly one of the key backers of the idea. British Deputy Prime Minister, David Lammy, is of the view that enforcing mandatory tolls, of which Iran is a proponent, would be disastrous.

The new line of thought is that if payment is voluntary, it could be in sync with the US advocacy of a free shipping transit system globally and result in a closure for the dispute over control of the Strait of Hormuz. A fifth of the global oil and energy supplies passed through the Strait before the conflict. Its forced closure by Iran after the Middle East conflict escalated has resulted in a sharp spike in oil prices. Oil rose to as high as $120 a barrel during the conflict.

The June ceasefire had eased oil prices, but this week’s flare-up in the Strait has pegged oil back to a sharp weekly rise by as much as 5%.

Iran is still seeking total control of the Strait of Hormuz and the US seeks a pledge from Tehran that it would stop firing on commercial ships.

Three Qatari and Saudi commercial tankers were attacked this week, prompting a retaliatory strike by the US on Iranian sites. In response, Tehran claimed it struck installations in its neighboring Gulf nations, which host US military assets and forces.

Iran’s Foreign Minister Abbas Araghchi and Omani Foreign Minister Sayyid Badr al-Busaidi are holding talks in Muscat on Saturday to discuss the crisis over the Strait of Hormuz, Axios reported.

Oman, which has control over the major part of the navigable waters in the strait, opposes a compulsory toll. It is also seen as a backer of the new proposal and hence the discussions could veer around the new proposal also.

Some British cabinet members also point out that that payments for specific navigational services were permissible in many natural waterways, including the strait of Malacca and the English Channel. Iran has warmed up to the proposals reportedly mooted by the London-based Energy Policy Research Group.

The vision envisages a transparent “service fee” that would would incentivise all stakeholders to cooperate. It seeks to package the payment not as a toll imposed on ships just for passing through the strait.

The proposal is roughly based on the functioning of the strait of Malacca, which links the Indian and Pacific Oceans. More than 120,000 vessels transit the strait annually.

The main obstacle for this proposal also is the hardline stance of the Islamic Revolutionary Guard Corps, a key power center in Iran. The IRGC does not see any need for a compromise formula as it pinpoints Washington as the aggressor in the present conflict.

It is not clear if the proposal has the blessings of the US administration.