• Iran and Oman are in technical talks to establish a new mechanism for managing the Strait of Hormuz, with Tehran asserting sovereignty and safe transit.
  • Iran has set up the Persian Gulf Strait Authority (PGSA), a regulatory body to oversee Hormuz operations, signaling a parallel governance layer.
  • The push comes amid heightened US-Iran tensions and could impact global oil shipping routes, insurance costs, and crude price volatility.

Iran–Oman Talks on Hormuz Governance

Iran’s Foreign Ministry spokesman Esmail Baghaei said Monday that the management of the Strait of Hormuz must be decided by Iran and Oman, emphasizing ongoing consultations at expert and technical levels. “We are in continuous contact with Oman to design a mechanism that ensures the safety and security of maritime traffic while safeguarding our sovereignty,” Baghaei told reporters in Tehran. The talks aim to formalize a framework for transit through the strategic waterway, which handles about a fifth of the world’s oil supply.

Baghaei framed the initiative as a response to “unlawful actions by the United States and Israel,” connecting the Hormuz mechanism to broader efforts to defend territorial sovereignty. Oman, a traditional mediator in the region, has expressed willingness to cooperate, according to people familiar with the matter. Attempts to reach Omani officials for comment were not immediately successful.

New Regulatory Body

In parallel to the diplomatic track, Iran has established the Persian Gulf Strait Authority (PGSA), a regulatory body tasked with monitoring and overseeing Hormuz-related operations. Official social media posts from Iranian state outlets confirmed the PGSA’s operational status this week, though specific functions remain unclear. The body is expected to support any new management mechanism, potentially introducing transit fees or rules that could alter shipping dynamics.

Market and Geopolitical Implications

The Strait of Hormuz is a critical energy chokepoint, and any shift in its governance can influence global oil shipping costs and crude price volatility. Insurance premiums for tankers transiting the strait have already ticked up in recent days, according to shipping brokers. A deal that ensures predictable transit could stabilize costs, but perceived restrictions on free passage might heighten risk premiums and push some shippers to consider alternative routes.

The United States has issued threats of sanctions in related discussions about Oman’s role in Hormuz management, reflecting ongoing geopolitical friction. Iran has publicly condemned such pressure, with Baghaei asserting that “external threats will not deter us from exercising our sovereign rights.”

Expert-Level Progress

Both sides have signaled progress in expert-level talks, with Iranian officials describing the discussions as “constructive.” Without a formal mechanism, the current ad-hoc arrangements risk unilateral disruptions, according to analysts monitoring the region. The PGSA’s activities are expected to become more visible in the coming weeks, as Iran seeks to operationalize its vision for a regulated waterway.