Oman has outlined plans to pay shipping companies a service fee when transiting the Strait of Hormuz, citing the Straits of Malacca and Singapore as possible candidates for the blueprint.
Background: The Straits of Malacca and Singapore are important shipping routes in Southeast Asia, running between Malaysia, Singapore, and the Indonesian island of Sumatra.
Users of the strait, including governments, institutions and businesses, voluntarily donated funds to a fund established in 2008 by the Nippon Foundation, a Japanese nonprofit organization. These payments are used to pay for safe navigation, such as the maintenance of buoys and lighthouses, and to protect the marine environment.
According to the Port of Singapore Authority, by July 2023, the foundation had received a total of only about $23 million in donations, of which about one-third came from the Nippon Foundation.
“I don’t know of anyone paying this much in fees, above and beyond Japan’s profits,” Peter Sand, chief analyst at cargo information firm Zeneta, told CNN.
He said the same framework could not be easily applied to the Strait of Hormuz, “especially since there are no obvious navigational issues to resolve.”
He noted that Hormuz’s revenue would also be used for purposes unrelated to the waterway itself, such as rebuilding Iran.
Remember: Transit through international waterways, including the Strait of Hormuz and the Strait of Malacca, is protected by United Nations conventions. These waterways are different from the man-made Panama and Suez Canals, where relevant authorities collect fees to maintain infrastructure and provide other services.
Michel Brouard, head of policy at maritime intelligence firm Kpler, said there were other examples of natural straits that charge navigation and security fees, such as Chile’s Strait of Magellan.
