Industry insiders: The proposed Strait agreement between Iran and Oman faces dual obstacles of U.S. sanctions and insurance issues.

Four industry insiders have stated that a proposed agreement between Iran and Oman would grant Tehran control over vessels entering the Gulf via the Strait of Hormuz. However, due to U.S. sanctions and restrictive insurance terms concerning any payments, the implementation of this agreement is challenging. Any fee-related measures would raise significant compliance issues, as the U.S. has imposed sanctions on Iran's "Persian Gulf Strait Management Authority," responsible for operating the waterway. The U.S. Treasury has also prohibited American persons from receiving services related to "guaranteeing safe passage" offered by the Iranian government. Industry insiders have indicated that any payment actions could lead to asset freezes. Another complicating factor is that the Lloyd's Market Association introduced a clause for use by war-risk insurers at the end of July. According to this clause, if a vessel pays tolls, transit fees, or other charges for passing through the Strait of Hormuz, its insurance coverage will be terminated. An insurance industry insider noted that shipping companies find themselves in a dilemma because the Lloyd's Market Association's terms prohibit insurers from providing coverage for shipowners who make payments, while Iran seeks to collect tolls.