Iran Proposes Hormuz Strait Bill Banning U.S., Israeli Ships

A proposed Iran-Oman deal to reopen the Strait of Hormuz faces a practical deadlock. U.S. sanctions and a new Lloyd's insurance clause make paying any transit fee legally toxic for shipping companies.

• 5–7% of cargo value: the fee Iran is seeking from ships using the strait.
• 3% is Oman's proposed fee; Washington wants no fees at all.
• 20% cargo-value penalty: Iran's stated fine for violating the new rules.
• Lloyd's Market Association now voids insurance cover for any ship that pays a transit fee.

Why it matters: The strait carried about one-fifth of world oil supplies before U.S.-Israeli airstrikes sparked conflict in late February. It was previously free to all ships.

• U.S. sanctions bar payments to Iran's Persian Gulf Strait Authority, which Tehran created in May.
• Shipping companies face a bind: paying the fee cancels their insurance; not paying risks Iranian penalties.

How 8 sources split on this story

Where they split: Whether a workable deal is imminent: Iran and Oman say an understanding is close; industry sources say the legal and insurance barriers make any fee arrangement unenforceable.

What’s next: Iran and Oman aim to finalize navigation terms; no U.S. direct talks have occurred in this period.

• A new 60-day negotiating window with Washington would begin once a framework is agreed.
• Can Iran and Oman design a fee structure that avoids triggering U.S. sanctions and the Lloyd's clause?
• Would the U.S. modify sanctions to allow a deal, or hold the no-fee line?
• How long can global oil markets absorb continued strait disruption if talks fail?