Oman's Diplomatic Mission in the Gulf: A Compromise Proposal for the Strait of Hormuz

The Malacca Model as a Template

Oman is pushing a compromise to resolve the dispute over the Strait of Hormuz. The proposal envisions that Iran would not have sole control over the strait. The system would thus be modeled on the approach used in the Strait of Malacca, where Indonesia, Malaysia, and Singapore request voluntary contributions from freighters to fund navigation, environmental protection, and rescue operations. At the Strait of Malacca and Singapore, a private foundation — in this case, a Japanese one — is tasked with collecting "donations" for passage. The revenues of the "Aids to Navigation Fund" (ANF) are invested in "maritime security" and environmental management.

According to the proposal, the fees would only be paid on a voluntary basis by users. This point is central, because the imposition of mandatory fees is unlawful from Washington's perspective. The United States, by contrast, is seeking a return to the pre-war status quo, when ships were able to pass through the route freely and without payments. The positions of Washington and Tehran are thus currently irreconcilable.

Another shortcoming of the Malacca model is plain to see for Tehran: the "donations" — around US$5 million annually — are minimal compared to the billions Iran is expecting. Tehran has signed but never ratified the 1982 UN Convention on the Law of the Sea, which further weakens the legal basis for fees.

Background: Oman's Role as Mediator

The initiative from Muscat does not come out of nowhere. Statements from Muscat immediately after the war began revealed irritation that the United States had essentially duped Oman: Foreign Minister Albusaidi had been in diplomatic talks just one day before the US-Israeli attack on the 28th. The United States, for its part, also likes to turn to Oman: the US-Iranian nuclear talks that produced the 2015 nuclear deal — later scrapped by US President Donald Trump — originally began in Muscat.

Particularly striking is Omani Foreign Minister Badr Albusaidi, who recently made his voice heard again with a commentary in Le Monde. A regional insider told the Reuters news agency today that the "myth of US containment policy" had collapsed. According to the insider, Oman has also secured the support of further Gulf states for its approach.

The Sultanate of Oman already played a crucial role in the UN-mediated Yemeni ceasefire negotiations in 2022. Oman also went particularly far in the 1990s in its support of the Israeli-Palestinian Oslo peace process: as early as 1996, Prime Minister Shimon Peres paid a visit (he went on to lose the elections shortly afterward to Benjamin Netanyahu). But Netanyahu also visited Muscat in 2018, hosted by the then charismatic Sultan Qaboos bin Said. As recently as May 2025, Iranian President Massoud Pezeshkian was a state guest in Muscat.

From Charisma to Pragmatism: Oman's Transformation

Qaboos died in January 2020 after 45 years in power; in a letter, he had designated his cousin Haitham bin Tariq as his successor. Haitham (70) has above all prescribed an economic modernization program for the country and pursues a less personalized, pragmatically interest-oriented policy aimed at attracting investors. This opens room for Oman to play an active mediating role.

Oman had also served as a mediator in the conflict in Yemen, in which the Houthis are involved. Experience gained from the 2022 Yemeni ceasefire negotiations is now feeding into the Hormuz initiative, according to diplomatic circles. The Gulf region is watching Muscat's efforts with great interest.

Outlook: Bridge-Builder in the Gulf

It remains to be seen whether the Malacca proposal can break the deadlock between the United States and Iran. Should Oman succeed, the strategic value of the Sultanate as an indispensable bridge-builder in one of the world's most dangerous waterways would be further cemented.