Iran Plan to Exclude U.S. and Israeli Ships From Strait of Hormuz Meets Swift U.S. Rejection

Iran’s Draft Plan to Exclude U.S. and Israeli Ships

Iranian state media reported Thursday that a draft plan to manage shipping in the Strait of Hormuz would block all U.S. and Israeli vessels, along with any cargo linked to those countries. The plan, still under review, also demands compensation for nations and individuals “that have caused damage to Iran” and threatens penalties of up to 20% of a violating vessel’s cargo value. The proposal emerged just as Washington signaled that a temporary deal to reopen the waterway could be imminent.

The United States quickly dismissed the terms. A U.S. official told CNBC that any temporary routes must be “without any impediments—meaning no approvals or permissions and no tolls or charges,” adding that “the Strait of Hormuz is an international waterway and no party controls the lanes or the ability to transit through them.” U.S. Central Command separately insisted that the southern route through Omani territorial waters remains “free and open for all commercial vessels.”

Despite the confrontation over exclusions, Iran and Oman are in the final stages of a separate understanding over temporary shipping routes. Iranian officials say inbound traffic will pass through Iranian waters while outbound ships use a route closer to Oman, with no fees or tolls. The arrangement is designed to revive the 60‑day ceasefire and memorandum of understanding signed between the U.S. and Iran on June 17, and has the endorsement of Gulf Cooperation Council members. The United Nations’ International Maritime Organization and the U.S. are expected to be involved in any announcement.

Behind Iran’s Push to Exclude U.S. and Israeli Vessels from the Strait

Why Iran Is Demanding New Routes and Excluding Its Rivals

Iran’s draft plan frames the old shipping routes as a national security liability, arguing that existing lanes “no longer meet the current difficult conditions.” By proposing to exclude the U.S. and Israel—and to penalize violators with cargo levies—Tehran is asserting a tangible form of control over a waterway that international law treats as a transit right. The threat of 20% cargo penalties is more than symbolic: it would immediately raise insurance costs and could deter insurers from covering voyages perceived as risky, effectively weaponizing the chokepoint even if the rules are never enforced.

The U.S. Stakes Its Claim on International Norms

Washington’s blanket rejection of any impediments is a legal and geopolitical line in the sand. By insisting on “no tolls or charges” and stating that Hormuz is an international waterway, the U.S. is signaling it will not recognize unilateral Iranian restrictions. U.S. Central Command’s parallel message—that the southern route is already open—creates a de facto alternative for commercial traffic, undercutting Iran’s leverage. The American stance is also a message to allies that freedom of navigation will be protected, even as diplomacy proceeds.

Oman’s Balancing Act and the June MoU Framework

Oman is once again the essential mediator. The temporary deal under negotiation builds directly on the June 17 memorandum of understanding, which gave both sides a 60‑day pause: Iran allowed free passage of commercial vessels through Hormuz, and Washington lifted its naval blockade on Iranian ships. That cycle is approaching its end—August 16—creating a hard deadline for a new arrangement. With GCC backing and IMO involvement, the framework is designed to be multilateral, but Iran’s parallel draft plan with exclusions tests whether a durable, non‑discriminatory regime can really emerge.

What This Means for Global Oil Markets

Any disruption, or even the credible threat of disruption, in the Strait of Hormuz immediately raises the global oil risk premium because roughly a fifth of the world’s petroleum passes through it. The current confusion injects short‑term volatility: a final, inclusive deal would likely push prices lower, while a breakdown or Iranian enforcement of penalties could send Brent crude sharply higher. For now, the market is pricing in a moderate degree of uncertainty, with the southern Omani route acting as a safety valve but one whose long‑term viability depends on the diplomatic outcome.

What Shippers, Traders and Governments Should Do Now

• Shipping lines should default to the southern Omani route. U.S. Central Command has already declared it “free and open,” and it avoids the Iranian waters where penalties could technically apply. Until a final deal emerges, this is the lowest‑risk corridor.
• Commodity traders should model a modest but sustained risk premium on Brent crude. Even the threat of 20% cargo penalties raises insurance and war‑risk premiums; that cost will feed into oil differentials until a confirmed, enforceable agreement is in place.
• Gulf governments should press for explicit UN IMO oversight. The IMO’s involvement, mentioned in the Oman‑Iran track, is the most credible way to reinforce international law and prevent Iran from unilaterally imposing tolls or restrictions.
• Markets must watch the 60‑day clock. The June 17 MoU expires around August 16. If no deal is announced by then, the temporary free‑passage arrangement collapses, and the risk of renewed friction—including potential U.S. naval enforcement—escalates sharply.
• Prepare for Iranian toll‑collection attempts even without a final deal. Iran’s draft plan explicitly threatens to levy penalties on violators; shipping companies should seek legal advice and flag‑state protection now, because onboard seizures or cargo detention could come with little warning.