Iran Rejects Oman's Hormuz Split, Wants Both Lanes

Crude prices climbed more than three dollars a barrel on Wednesday after Tehran dismissed Oman’s proposal for shared management of the Strait of Hormuz as an arrangement with no chance of success. Serbia buys its fuel at prices set thousands of kilometres away, which makes a dispute over two shipping lanes in the Gulf the fastest-travelling Middle East story on the Belgrade pump price board.

Oman and Iran have been trading proposals since early summer, with Gulf states backing the Omani version. Muscat offered a 50-50 arrangement: each side would run the lanes along its own coast, and voluntary fees paid by shipping would be split between the two. The template is the Strait of Malacca, where Indonesia, Malaysia and Singapore together raise about $70 million a year for navigation safety, environmental protection and search and rescue.

Iran’s counter-offer rewrites the logic of the deal. One route would run entirely through Iranian territorial waters, and part of the opposite lane would run through Iranian waters as well, giving Tehran oversight of both inbound and outbound traffic. Iran is also asking for roughly $1 million per ship, according to reporting on the talks, with the money earmarked for repairing damage from the American and Israeli strikes.

Why is Tehran refusing the Malacca model?

Because that model splits both the control and the revenue, and Iran will concede neither. The Malacca scheme rests on voluntary contributions from shipowners and on three coastal states that between them raise less than a hundred million dollars a year. A demand of a million dollars from a single vessel belongs to a different category altogether: it stops being a safety contribution and becomes a toll, and that is where the talks stalled.

Several technical questions remain unsettled, the kind that look minor until they turn into an incident on the water:

• the direction of travel in each lane, meaning who enters and who exits on which side
• the level of the fees and the mechanism for collecting them
• the definitions underpinning the arrangement, from what joint management means to who supervises it
• mine clearance in the strait, still one of the open points between Tehran and Muscat

What came before

Before the United States and Israel struck Iran in late February 2026, roughly a fifth of the world’s oil and liquefied natural gas shipments passed through the strait. The Islamic Revolutionary Guard Corps (IRGC) issued a map of permitted shipping routes in April 2026, Iran and the United States signed a memorandum of understanding in June 2026, and the strait partially reopened after that.

The arrangement did not hold. The IRGC stopped three oil tankers, saying they had ignored warnings and were sailing an unsafe and illegal route. Set that against Iran’s demand that both lanes run through its waters, and the picture is of a negotiation in which one party is already enforcing the rules still being discussed.

We covered this dispute earlier, when Iran and Oman were negotiating and disagreed over transit charges. Back then the open question was how much shipowners should pay. The question now is larger: whose waters they are sailing through at all.

How the dispute reaches Serbian pumps

The market answered the same day. The jump of more than three dollars a barrel on July 29, 2026 did not follow any interruption of supply, it followed the judgment that a return to the pre-February regime is not close. Every day without an agreement means costlier hull insurance, longer routes around the strait and a higher price at the end of the chain, and that end of the chain includes Serbia.

The next step is another exchange of proposals between Tehran and Muscat, which is still under way. Until the two sides agree on the direction of travel, the size of the fee and even the name of the arrangement, the Strait of Hormuz remains a stretch of water where three tankers can move the price of a barrel.