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Home Business & Finance
Europe Explores Navigation Fee Plan for Strait of Hormuz Shipping

Europe Explores Navigation Fee Plan for Strait of Hormuz Shipping

Ayobami OwolabibyAyobami Owolabi
1 hour ago
in Business & Finance
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European governments are examining proposals that would permit the collection of navigation fees from vessels passing through the Strait of Hormuz, provided the charges remain voluntary and receive backing from the United Nations agency responsible for regulating international maritime transport.

Britain’s Deputy Prime Minister, David Lammy, warned that making such fees compulsory would have serious consequences. However, some members of the cabinet noted that charging for specific navigational services is already an accepted practice in several key waterways, including the Strait of Malacca and the English Channel.

United States officials have urged Iran to publicly affirm that the Strait of Hormuz remains open to international shipping and guarantee that vessels travelling through the waterway will not be targeted.

The officials attributed the difficulty in securing and maintaining an agreement to what they described as internal political divisions within Tehran. However, Iran has rejected those claims, insisting that its leadership remains united, including on matters relating to the strategic waterway.

On Friday, Donald Trump repeated on social media that he considered the interim ceasefire agreement to be “over,” while maintaining that the United States would continue negotiations aimed at reaching a lasting end to the conflict.

A few hours later, the U.S. president issued fresh warnings to Iran, saying the country would face severe consequences if it attempted to assassinate him.

Europe Explores Navigation Fee Plan for Strait of Hormuz Shipping

“1,000 missiles are locked and loaded and aimed at the Islamic Republic of Iran,” Trump wrote.

He also declared that the U.S. military would “completely decimate and destroy all areas of Iran – PRAISE BE TO ALLAH!”

The remarks came shortly after the funeral of former supreme leader Ayatollah Ali Khamenei, where some attendees reportedly called for the assassination of the U.S. president.

Iran’s new supreme leader and son of the late Khamenei, Mojtaba Khamenei, also pledged that the country would retaliate for his father’s death.

In a written statement, he said the pursuit of revenge “is the will of our nation and must certainly be carried out.”

Oman has already drafted a proposal for the Strait of Hormuz, modelled on the framework used in the Strait of Malacca, in collaboration with British legal experts. Muscat has also offered to dispatch its legal team to Tehran to provide Iranian officials with a detailed explanation of the proposal.

Meanwhile, Iranian state media reported on Friday that Foreign Minister Abbas Araghchi is expected to visit Oman on Saturday for discussions centred on the strategic waterway.

According to Iran’s official IRNA news agency, Foreign Ministry spokesperson Esmaeil Baghaei said the visit “will be focused on the Strait of Hormuz and shipping safety” and is “a continuation of the consultations that we started with Oman over the past one or two months.”

Turkey’s Foreign Minister, Hakan Fidan, expressed optimism that Iran and Oman could reach an agreement over issues relating to the Strait of Hormuz before the weekend ends. Speaking to state broadcaster TRT, he said he believed ongoing negotiations were moving toward a resolution.

However, diplomatic tensions escalated on Saturday after Iranian Foreign Minister Abbas Araghchi accused the United States of breaching the existing memorandum of understanding (MoU). He alleged that Washington violated the agreement by withdrawing waivers that had allowed Iran to trade its oil in U.S. dollars, a decision taken following the attacks on vessels navigating the strait.

Oman, which oversees most of the navigable waters in the Strait of Hormuz, has maintained its opposition to the introduction of mandatory transit fees.

Meanwhile, Majed al-Ansari, spokesperson for Qatar’s Foreign Ministry, warned against granting Iran greater control over the strategic waterway in a manner that conflicts with international maritime law.

“Giving the Iranians sovereignty over the strait in a way that contradicts international maritime law will be basically agreeing to be hostages to whatever radical element wants to take over the strait at any time,” he said.

However, diplomats believe Oman’s alternative proposal may fall short of what some factions in Iran, particularly the Islamic Revolutionary Guard Corps (IRGC), are seeking.

One diplomat said, “There are sections of the IRGC that say the US launched an unlawful attack on them in February, so why should they bother with the international law of the sea? Others want to cooperate. There is a division in Tehran.”

Iran is also facing growing pressure from neighbouring countries to clearly explain its proposals, including whether the planned navigation fees would effectively become mandatory.

The Iranian Embassy in London said it is considering proposals developed independently by the Energy Policy Research Group.

According to the policy paper, introducing a transparent service fee as part of a broader regional framework would encourage cooperation among all parties. It also stressed that the proposal should not be viewed as a simple toll charged to ships merely for transiting the Strait of Hormuz.

During a meeting of the International Maritime Organization council on Thursday in London, the Oman delegate Khamis bin Mohammed Al Shamakhi said: “The right of transit passage through straits used for international navigation is guaranteed under international law and does not support the imposition of transit fees on vessels passing through the Strait of Hormuz.”

He noted, however, that Oman supports discussions on voluntary arrangements connected to navigational assistance services.

According to him, such measures could improve maritime safety and security, safeguard the marine environment, minimise pollution risks, and strengthen emergency response capabilities for incidents such as ship collisions and onboard fires involving vessels and oil tankers.

These remarks reflect Oman’s extensive study of the governance model used in the Strait of Malacca, the strategic waterway linking the Indian and Pacific Oceans. A report submitted to the International Maritime Organization (IMO) council on the cooperative framework for the Straits of Malacca and Singapore stated that more than 120,000 vessels pass through the route each year.

The report further stated that the mechanism has developed into “a structured and inclusive platform through which emerging risks, technological developments and environmental priorities in the straits may be collectively addressed.”

It added that the initiative continues to operate through voluntary financial contributions, with Japan remaining one of its key supporters.

During the meeting in London, a coalition of several Gulf and European countries pushed for a resolution condemning Iran over what they described as attempts to assert control over the Strait of Hormuz through attacks on commercial vessels.

The proposed resolution, however, failed to gain the backing of Russia and China.

Russia argued that the proposed motion failed to address the underlying causes of the crisis, while China criticised the draft as biased and said it exceeded the mandate of the IMO.

The proposal followed a series of U.S. strikes this week targeting more than 150 locations, mainly in southern Iran, in an effort to weaken Tehran’s capability to disrupt maritime traffic using drones, missiles and small attack boats. In response, Iran launched attacks on U.S. military bases in Kuwait and Bahrain.

According to one diplomat, the latest escalation stems from two key disputes. One relates to who should oversee the Strait of Hormuz as it reopens, while the other concerns its future governance, including whether Iran would be willing to adopt a framework.

Clause 5 of the memorandum of understanding (MoU) — the ceasefire roadmap agreed by Washington and Tehran last month — states that Iran would make every effort to ensure the safe passage of commercial vessels through the Strait of Hormuz without imposing any charges for an initial period of 60 days.

The agreement also provides that, once technical and military challenges are resolved, commercial shipping through the waterway would be restored within 30 days.

The United States has maintained that the memorandum of understanding (MoU) does not give Iran the authority to decide which commercial vessels may pass through the Strait of Hormuz or require ships to follow routes designated by Tehran.

The agreement also includes a separate provision requiring Iran to engage in discussions with Oman on developing a long-term framework for managing the strategic waterway.

Tags: Europefederal characterForeign NewsgovernmentNewsShippingStrait of Hormuz
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Ayobami Owolabi

Ayobami Owolabi

Owolabi Ayobami is an emerging entertainment journalist, dedicated to delivering the latest scoop on Nollywood, music, and celebrity culture. With a keen eye for detail and a passion for storytelling, he brings fresh insights and perspectives to the entertainment beat.

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