Iran promises special concessions to China for Strait of Hormuz access

Following a four-month military conflict with the US and Israel, Iran is collaborating with Oman to introduce transit fees for the Strait of Hormuz. Iran's ambassador to China, Abdolreza Rahmani Fazli, announced on July 4, 2026, that China and other friendly nations will receive special concessions. While the US and Gulf Arab nations oppose any fees, some European countries accept them but urge non-discrimination. The waterway previously carried 20% of global oil and LNG supplies.

Strait of Hormuz service fees

• ▪Iran and Oman are collaborating on new arrangements to levy service fees on ships transiting the Strait of Hormuz to guarantee safe passage and cover environmental costs
• ▪Iran's ambassador to Beijing, Abdolreza Rahmani Fazli, stated that the enforcement of Strait of Hormuz service fees will comply with international laws of the sea

Iran-China special concessions

• ▪China, which purchases almost all of Iran's oil exports, has called for the unhindered flow of shipping through the Strait of Hormuz
• ▪Iran's ambassador to Beijing, Abdolreza Rahmani Fazli, announced on July 4, 2026, that China and other friendly nations will receive special considerations regarding Strait of Hormuz service fees

Post-conflict strait reopening challenges

• ▪Traffic in the Strait of Hormuz only recently began picking up following an interim peace deal signed in June 2026, after Iran effectively closed the waterway in late February 2026
• ▪At least eight ships attempting to leave the Persian Gulf along the Omani coast turned back between July 3, 2026, and July 4, 2026, amid ongoing complexities in reopening the Strait of Hormuz

International responses to transit charges

• ▪The United States and Gulf Arab countries insist that Iran and Oman cannot impose any charges for transit through the Strait of Hormuz
• ▪Some European nations accept that transiting ships must pay fees but have urged Iranian and Omani officials not to discriminate based on ship nationality

US-Iran military conflict

• ▪Iran's ambassador to Beijing declared the Strait of Hormuz a matter of national security following a four-month military conflict involving the United States, Israel, and Iran
• ▪The United States and Israel initiated airstrikes against Iran in late February 2026, prompting Iran to effectively close the Strait of Hormuz

Global energy supply disruptions

• ▪Approximately one-fifth of the world's oil and liquefied natural gas supplies transited through the Strait of Hormuz prior to the US-Iran military conflict
• ▪China has sought to protect shipping in the Persian Gulf to prevent domestic economic strain from further energy supply disruptions