Why Oman now holds the key to Hormuz

Omar Ahmad, The Cradle, June 1, 2026 ―

As the Strait of Hormuz moves back to the center of Gulf politics, Muscat’s careful diplomacy with Tehran is becoming a test of whether regional security will be managed by Gulf states or dictated from outside.

On 5 May 2026, Iran announced the establishment of the Persian Gulf Strait Authority (PGSA), a body presented by Tehran as a mechanism for regulating transit through the Strait of Hormuz and collecting fees from commercial passage. If implemented, the move would turn a long-held Iranian threat into an administrative reality, giving Tehran new leverage over one of the world’s most sensitive trade arteries.

The Sultanate of Oman sits at the center of that calculation. Tehran has included Muscat in discussions over the future handling of the strait, partly because Oman has long been viewed as a dependable mediator, and partly because geography gives the sultanate an unavoidable role. 

Muscat is not merely hosting talks or passing messages between rivals. It is being drawn into the question of who sets the rules for Hormuz, how far Iran can formalize its position there, and whether the GCC can live with an arrangement that gives member state Oman a central role in keeping the waterway open.

Washington has made clear that it will not accept any arrangement that weakens its ability to police the waterway or limit Iran’s regional leverage. Oman is now paying the price for its own usefulness. The “Switzerland of the Middle East” is no longer only the quiet host of talks between enemies; it is becoming a target of pressure because its diplomacy points toward a Gulf order less dependent on US coercion.

Muscat’s diplomatic capital

Oman’s value in the Persian Gulf rests on a combination of geography, restraint, and accumulated trust. For decades, Muscat has acted as a channel between states that cannot speak directly, from the US and Iran to rival Gulf capitals and the de facto government in Sanaa and Saudi Arabia. Its relations with Tehran predate the Islamic Republic, and have usually been guided less by ideology than by the hard facts of coastline, trade, and security.

Ships entering or leaving the Strait of Hormuz must move through the Gulf of Oman, while the established traffic separation scheme runs through waters adjacent to the Omani exclave of Musandam. This makes Oman indispensable to every actor involved: Iran, the GCC states, Pakistan, India, China, the US, and the European energy markets that depend on Gulf supply.

Dr Mohammed bin Awad al-Mashikhi, an Omani academic, writer, and researcher specializing in public opinion and mass communication, who has written on Hormuz and commented on regional affairs, tells The Cradle that the present crisis has deep roots. 

“This is an old-new issue,” he says, pointing to the 1974 Oman–Iran agreement during the Shah’s era, when the two sides divided responsibilities in the Strait of Hormuz. He says Oman’s role later developed around supervising passage, protecting its territorial waters, preserving the marine environment, and guiding vessels through the strait.

In Iranian foreign policy, Oman’s utility is obvious. Unlike Riyadh during the peak years of Saudi–Iranian confrontation, Muscat never tried to turn its relationship with Tehran into a sectarian or ideological battlefield.

It maintained communication, protected its autonomy, and refused to become a platform for maximum-pressure campaigns. That posture has now given Oman room to speak to Iran at a moment when few others can.

Inside the GCC, Oman has rarely acted as a spoiler. But in Iran, Yemen, and Palestine, Muscat has often kept its distance from the more openly aligned policies of Abu Dhabi and Riyadh.

Dr Abdullah Baabood, an Omani scholar of Gulf affairs and international relations, tells The Cradle that Oman’s current position on the Strait of Hormuz fits within its long-standing balancing strategy:

“This strategy is best understood as an attempt to balance three objectives simultaneously: preserving freedom of navigation and the strait’s international commercial functions; maintaining its strategic relationship with Iran and preventing escalation; and avoiding a direct confrontation with the US, western powers, and the Gulf countries. The difficulty for Muscat is that these objectives are becoming increasingly difficult to reconcile as the Hormuz issue becomes more politicized.”

That is why Oman’s mediation between Iran and the US in 2025 and 2026 matters. In the 2026 track, Omani Foreign Minister Sayyid Badr bin Hamad al-Busaidi was reported to have extracted from Tehran a major nuclear concession, including language on zero enrichment. Whether that understanding can be revived after the war is unclear, but the episode underlined how seriously Iran treats Oman as a channel.

For Tehran, Oman is a Gulf state that has preserved relations through multiple crises, refused to join the Abraham Accords, and continued to argue that regional security cannot be outsourced to extra-regional powers. For Washington, that same independence has become increasingly uncomfortable, especially as Muscat refuses to fold its mediation into the US-Israeli normalization track.

The Iran track

The core question now is whether Oman is only working to preserve safe passage through the Strait of Hormuz, or whether it is moving toward a more formal understanding with Iran on how transit, security, and possibly fees will be handled. 

Muscat’s public language remains cautious. Omani officials speak of “safe and sustainable” navigation, de-escalation, and arrangements that protect international trade. Tehran’s language has been more assertive, particularly around regulation and payment.

Ahmed al-Mukhaini, an independent public policy analyst, tells The Cradle that Oman does not view Hormuz as “a bargaining chip,” but as “a function of sovereignty and consequential responsibility to maintain the strait as a shared strategic artery.” Oman’s role, he says, is “to keep navigation open, lawful, and predictable, while preventing the strait from becoming a theater for escalation.”

Baabood says Omani statements have consistently emphasized “safe passage, maritime security, international law, uninterrupted trade and supply chains, and diplomacy as the means to guarantee navigation.” 

Recent Omani–Iranian meetings, he adds, are publicly framed around “principles governing freedom of navigation” under international law rather than exclusive control arrangements. 

“This is very much in line with Oman’s traditional position: the strait is a shared waterway whose stability benefits everyone, including Oman itself,” Baabood explains. 

Mukhaini says Oman’s engagement with Iran is rooted in geography rather than ideological alignment. “Iran is a neighbor across a narrow and sensitive waterway; engagement is therefore not a luxury but a security inevitability,” he says, adding that recent Oman–Iran discussions have focused on “smooth and safe passage through the strait.”

Mashikhi, meanwhile, has warned before that unilateral Iranian moves in Hormuz would invite precisely the kind of outside intervention Tehran says it opposes. He went on to say that during the late Iranian president Ebrahim Raisi’s 2022 visit to Muscat, he told Iranian state television that Tehran should avoid militarizing the strait or acting without coordination with Oman. 

“I warned at the time that if Iran did not coordinate with Oman, this passage would turn into an international corridor and major powers would enter the file,” Mukhaini adds. In his view, the latest crisis has confirmed that warning.

The more intricate part of the story is economic. Oman and Iran have been steadily trying to deepen trade, transport, energy, and port connections, giving Muscat an interest in a settlement that stabilizes the strait without surrendering it to Washington’s military logic. 

At the same time, Mukhaini argues that Oman’s engagement with Iran is not a departure from its Gulf commitments: 

“It is how Oman protects them. Muscat’s value to its neighbors lies precisely in its ability to speak to Tehran directly and candidly without becoming Tehran’s proxy, and to reassure the GCC without becoming part of a confrontational bloc.”

Saudi Arabia, Kuwait, Qatar, and Pakistan all have reasons to watch the file closely, but Oman’s most immediate coordination is with the states directly exposed to the waterway.

Mashikhi says Muscat continues to coordinate with Gulf states on Hormuz, particularly those most exposed to the waterway. During the recent crisis, he says, Oman coordinated with Saudi Arabia and Kuwait over the passage of some vessels through Omani territorial waters, “and of course in coordination with Iran.” 

But he adds that Oman does not want to carry the burden alone: “In my personal view, Oman does not want to be the policeman of the Strait without compensation for the risks it faces.” 

None of this means Riyadh, Doha, or Islamabad will simply endorse an Iranian tolling scheme. It does mean that Oman is not operating in a vacuum, and that its Iran-facing diplomacy may be easier for these states to tolerate than a direct Iranian–US confrontation over the strait.

Mukhaini summarizes Oman’s position in three anchors: “neutrality is not passivity; balance is not ambiguity; and dialogue is not alignment.” Oman’s standing, he says, remains based on “mutual respect, non-interference in internal affairs, and respect for international legality,” which in turn requires regional responsibility and global cooperation.

According to Baabood, Muscat is probably moving toward a practical security understanding with Tehran, but not a joint political control regime:

“The likely reality is that Oman is trying to negotiate deconfliction arrangements, shipping coordination, crisis-management mechanisms, and confidence-building measures, without endorsing Iran’s broader geopolitical claim to regulate international shipping. In other words, Oman seems to be seeking a functional arrangement, not a strategic alliance over Hormuz.”

Trump’s threat to ‘blow up’ Oman 

On 27 May, US President Donald Trump escalated the pressure with a threat that shocked even some of Oman’s critics. Commenting on Oman’s role in the Hormuz talks, he warned: “Oman will behave just like everybody else, or we’ll have to blow them up.” The remark was understood across the region as a warning that Washington’s patience with Omani mediation had thinned.

Iranian Foreign Ministry spokesman Esmail Baghaei condemned Trump’s threat as “dangerous” and “bullying,” saying that threats to “destroy” a UN member state that has long played a constructive mediating role violated the basic prohibition on the threat of force.

A day later, Iranian Foreign Minister Abbas Araghchi said he had expressed Iran’s “solidarity with Oman in the face of any threat” during a call with his Omani counterpart.

The deeper US concern is not only the tolling question. Washington is trying to prevent any settlement that weakens its ability to police the Gulf’s maritime chokepoints, while also tying post-war arrangements to the broader normalization track with Israel. 

In Oman, the normalization push runs into a foreign policy tradition built on the Arab Peace Initiative, Palestinian rights, and a refusal to treat recognition of Israel as the entry fee for regional stability.

Omani analyst Dr Mohammed Alaasmi captured the mood in a post on X, arguing that Trump’s pressure was less about fees in the strait than about Oman’s firm position on the Abraham Accords file. In his reading, the threat reflected US frustration over Muscat’s refusal to move the normalization track in a direction useful to Washington and Tel Aviv.

Oman’s stance has also been shaped by events in Yemen. The UAE-backed, now-disbanded Southern Transitional Council’s (STC) open alignment with Israeli interests, combined with threats toward Omani sovereign territory, reinforced Muscat’s caution about the strategic spillover of normalization. 

The sultanate understands that an Israel-friendly order on the Arabian Peninsula would carry direct consequences along its borders and maritime approaches.