India’s Hormuz Moment: The Treaty Nobody Wants to Name

The Strait of Hormuz could become a focal point of major power negotiations, requiring India to adopt an active, engaged approach. To translate this analysis into action, India could consider a suite of engagement options: intensifying bilateral diplomacy with both Iran and Oman; building coalitions with other major energy importers such as Japan, South Korea, and the European Union to press for an open, rules-based arrangement; raising the issue in multilateral forums like the International Maritime Organization and the United Nations; proposing regular joint maritime security consultations with Gulf Cooperation Council states; and seeking observer or stakeholder status in any future Hormuz protocol negotiations. These steps would allow India to assert its interests and shape potential outcomes in alignment with its energy and strategic imperatives.

India’s preferred arrangement for the Strait of Hormuz would avoid an Iranian-dominated Montreux model, an American-controlled military corridor, or a Chinese energy protectorate. Instead, India would logically prefer an open, untolled, Oman-balanced, and internationally supervised mechanism that safeguards merchant shipping, ensures uninterrupted energy flows, and prevents any single power from transforming the strait into a tool of political leverage.

A likely scenario is that the Strait of Hormuz remains open, despite concerns about a possible closure. Rather than a prolonged blockade, rising tensions, tanker seizures, insurance challenges, naval advisories, and diplomatic pressures could result in a more measured outcome, such as a 'mechanism for sustainable security,' a 'protocol for safe shipping,' a 'regional maritime arrangement,' or a 'traffic management understanding' between Iran and Oman.

Although such an arrangement may appear technical, it could represent the initial step toward a Hormuz-specific analogue of the Montreux Convention. The 1936 Montreux Convention granted Turkey a unique legal status over the Bosporus and Dardanelles, preserving commercial passage while regulating warship transit. According to Turkey’s foreign ministry, Montreux remains a cornerstone of Black Sea security, providing merchant vessels with freedom of passage and imposing restrictions on warships regarding tonnage, class, notification, and duration of stay.

Such a scenario would have direct and significant implications for India. It would influence crude oil imports, LNG flows, tanker availability, war-risk premiums, refinery scheduling, freight rates, insurance exposure, and the broader issue of whether India’s energy security remains subject to externally determined rules.

However, the Strait of Hormuz differs fundamentally from the Bosporus; Iran is not analogous to Turkey, Oman is not comparable to the Sea of Marmara, and the Persian Gulf is distinct from the Black Sea.

These differences highlight the importance of potential developments in Hormuz.

The latest developments make this scenario less theoretical. Reports now suggest that any U.S.-Iran understanding may include a phased reopening of the Strait of Hormuz, mine clearance, a pause on transit fees, and some form of Iran-Oman mechanism for safe navigation. Iran, meanwhile, is already trying to frame the issue not as toll collection but as navigational service fees. That distinction is where the future battle over Hormuz may be fought: not between open and closed, but between free passage and managed passage. Reuters has reported that Iran would open Hormuz about 30 days after a peace deal and clear mines during that period, while other reporting has noted Iran’s distinction between tolls and navigational service fees.

A direct copy of Montreux cannot be imposed on Hormuz. The legal foundations are different. The geography is different. The balance of power is different. But a Montreux-like political bargain is possible, especially after a prolonged crisis in which shippers, insurers, oil buyers and Gulf exporters begin to prefer a managed chokepoint over an unmanaged crisis.

The real question is not whether Hormuz can become another Turkish Straits regime in law. It cannot. The real question is whether Hormuz can become another Montreux in political function: a chokepoint where great powers accept that one local gatekeeper, or a pair of local gatekeepers, will manage the passage of ships under a negotiated formula.

This presents a significant risk.

The Strait of Hormuz is not merely a narrow waterway between Iran and Oman. It is the pressure valve of the global energy system. The U.S. Energy Information Administration states that the Strait connects the Persian Gulf with the Gulf of Oman and the Arabian Sea, is deep and wide enough for the world’s largest crude tankers, and remains one of the world’s most important oil chokepoints. In 2024, roughly 20 million barrels per day of oil flowed through Hormuz, equal to about 20 percent of global petroleum liquids consumption. Around one-fifth of global LNG trade also moved through Hormuz in 2024, primarily from Qatar.

These figures demonstrate that Hormuz is not solely a concern for Iran, Oman, the United States, or China. It is a critical point for the global economy.

The Montreux Convention was born from a different geography. The Turkish Straits connect the Black Sea to the Mediterranean. Turkey sits astride both sides. That gave Ankara a unique sovereign and strategic position. Montreux preserved merchant shipping while regulating naval movements, especially those of non-Black Sea warships. Under Turkey’s implementation, non-littoral warships face restrictions on aggregate tonnage, duration of stay in the Black Sea and prior notification.

Hormuz does not offer such simplicity. The northern shore is Iran. The southern side is Oman’s Musandam Peninsula, with the UAE nearby. The Strait is not one country’s internal maritime corridor. It is an international strait used for navigation between one exclusive economic zone or high seas area and another. Under UNCLOS Part III, ships and aircraft enjoy the right of transit passage, and that passage “shall not be impeded.” UNCLOS also says states bordering straits must not hamper transit passage and that there shall be no suspension of transit passage.

One complication is that Iran has signed but not ratified UNCLOS, while the United States is also not a party, though Washington treats key navigational provisions as customary international law. This does not make a toll regime lawful, but it explains why Tehran may believe there is room for legal and political contestation.

That is the legal wall against a Hormuz-Montreux copy.

UNCLOS does allow states bordering straits to regulate sea lanes and traffic separation schemes where necessary for safety, but such arrangements must conform to generally accepted international regulations and be referred to the competent international organisation, practically the IMO, before adoption. It also allows cooperation between user states and Strait states for navigational aids, safety improvements and pollution prevention.

So the door is not closed to a Hormuz arrangement. It is closed only to the wrong kind of arrangement.

Iran cannot legally create a toll booth in Hormuz merely by declaring that it has the right to manage the Strait. Reuters has reported that a diplomatic deal would be unfeasible if Tehran implemented a tolling system in the Strait, and current reporting indicates that Iran has tried to distinguish between tolls and navigational service fees. Under UNCLOS, states bordering straits cannot charge merely for permission to pass, although specific service fees, such as pilotage, tug assistance, port services, navigational support or safety services, may be treated differently if they are genuine and non-discriminatory.

This is the first key distinction.

A toll is payment for the right to pass. That is politically explosive and legally weak in a natural international strait.

A service charge is payment for something actually provided: VTS monitoring, pilotage, search-and-rescue cover, pollution response, lighthouse dues, emergency towage, mine-clearance assurance, or compulsory reporting infrastructure. That is where Iran and Oman could seek a grey zone.

This is how a Hormuz-Montreux idea would be dressed up. Nobody would call it “Iranian control.” Nobody would say “toll.” The diplomatic phrase would be “safe and sustainable maritime passage.” The operational phrase would be “traffic coordination.” The financial term is “service recovery.” The political phrase would be “regional ownership.”

However, the underlying issue remains one of power.

A future Hormuz arrangement would likely contain several layers.

First, it would reaffirm free passage for merchant ships. Without this, China, India, Japan, South Korea, Qatar, Saudi Arabia, the UAE and Europe cannot accept it. The EIA estimates that in 2024, 84 percent of crude oil and condensate and 83 percent of LNG that moved through Hormuz went to Asian markets. China, India, Japan and South Korea together accounted for 69 percent of crude and condensate flows through Hormuz. Any regime that makes Asian energy hostage to one coastal state becomes unacceptable to the very buyers who keep Gulf energy markets alive.

Second, it would regulate traffic without formally restricting it. This means compulsory reporting points, traffic lanes, designated waiting areas, emergency anchorage zones, VTS identification, pollution reporting, dangerous cargo declarations and perhaps pilotage recommendations for certain vessel classes. On paper, this is normal maritime safety. In practice, it creates a database of every tanker, LNG carrier, naval auxiliary and cargo ship entering or leaving the Gulf.

Third, it would distinguish between merchant ships and warships. This is where the Montreux spirit enters. Iran would likely demand prior notification of foreign naval movements. The United States would oppose any permission-based regime for warships, especially because such transit includes navigation and overflight for continuous, expeditious passage. China would publicly support lawful passage but quietly welcome any arrangement that reduces American naval freedom near its energy lifeline. Gulf states would be nervous because a warship notification regime could reduce escalation, but also give Iran advance notice of Western naval movements.

Fourth, it would draw a line between transit and military activity. A destroyer moving through the Strait is one thing. A carrier strike group loitering near the entrance is another. A submarine transiting submerged is one thing under the broader transit-passage argument. A submarine conducting intelligence collection close to Iranian waters is another. Hydrographic survey, intelligence gathering, drone operations and electronic warfare would become the real battlefield of interpretation.

Fifth, it would create a financial mechanism. This is the most dangerous part. If Iran and Oman charge only for genuine services, the arrangement may withstand legal scrutiny. If the charge becomes a disguised toll based on ship type, cargo, flag, owner, destination or political alignment, it becomes a precedent for monetising natural straits. That would alarm every maritime trading nation, because the logic could spread from Hormuz to Bab el-Mandeb, Malacca, Gibraltar, Sunda, Lombok and beyond.

Sixth, it would create an insurance effect. The modern shipowner does not only ask whether a strait is legally open. He asks whether the P&I Club will cover the transit, whether the war-risk premium has jumped, whether the charterparty permits deviation, whether the flag state has issued an advisory, whether crew unions object, whether the cargo owner will accept delay, and whether a bank will finance the cargo if the route is politically exposed. A strait can remain legally open and still become commercially half-closed.

Policymakers may overlook that actual attacks are not required to disrupt shipping. The mere perception of risk can affect insurance, finance, chartering and voyage decisions.

Therefore, Iran and Oman would not be the only principal negotiators.

Formally, Iran and Oman are indispensable. Iran has the northern shore, islands, missiles, small boats, Revolutionary Guard networks and political will to use risk as leverage. Oman, through Musandam, forms the southern flank of the Strait, with regional credibility and a long tradition of quiet mediation. Recent reporting has repeatedly placed Oman at the centre of the diplomatic and navigational discussion, with Iran arguing that future management of Hormuz is a matter for Oman and Iran, while the U.S.-Iran reopening of discussions also carries an Oman-linked maritime-security dimension.

This is also where my earlier work three years ago, “Can China Break Out of the OAK Triangle?”, becomes relevant. In that formulation, OAK stood for Oman, Afghanistan and Kashmir. Afghanistan and Kashmir are separate theatres, and the direction of pressure in both is already visible. But in the Hormuz question, Oman becomes the quiet hinge, because it is the only geographic and diplomatic point through which any Iran-linked security formula can be made acceptable to the wider world.

But the two major powers behind any meaningful bargain would be the United States and China.

The United States would be at the table because it remains the principal military actor capable of organising naval escorts, sanctions pressure, insurance reassurance, interdiction, intelligence surveillance and diplomatic punishment. Even if America no longer imports Gulf oil in the quantities it once did, the dollar system, global shipping finance, war-risk insurance, Gulf security architecture and the Fifth Fleet logic still connect Washington to Hormuz.

China would be at the table because it is the great consumer exposed at the far end of the pipe. Beijing may speak the language of sovereignty and non-interference, but it cannot allow its oil and LNG lifeline to become subject to an unpredictable Iranian toll regime. Reuters reported that U.S. and Chinese officials agreed that no country or organisation should be allowed to charge tolls for passage through international waterways such as the Strait of Hormuz. Reuters has also reported U.S. statements that China wants Hormuz to remain open without restrictions, including the absence of tolls or military control.

But China’s deeper preference may not be identical to America’s. Publicly, China cannot oppose open passage because its own energy lifeline depends on the Strait of Hormuz. But quietly, Beijing would not object to a Montreux-like mechanism that complicates routine U.S. naval access, establishes prior-notification practices, or requires political consultation before major foreign warship movements in the Gulf. Such an arrangement may be unacceptable to the United States and many other maritime powers, because it would dilute the long-standing principle of free naval transit through an international strait. Yet this is precisely the kind of structure China could quietly prefer. It would reduce the need for China to directly counter U.S. naval power in a region where the U.S. Navy still enjoys unmatched reach, bases, carrier capability, escort strength, surveillance depth and operational experience. If American warships face procedural restraint before entering or operating inside the Gulf, China gains indirectly without having to match the U.S. ship for ship. In that sense, Beijing would not need to defeat American naval power in the Gulf. It would only need the rules of access to become more complicated for Washington.

This represents a subtle strategic alignment.

• America wants Hormuz open because it is a freedom-of-navigation issue, a dollar issue, an alliance issue and a credibility issue.
• China wants the Strait of Hormuz open because it is an energy security issue.

These two positions are not identical, but they overlap.

This is why Russia is not the primary co-negotiator, despite its relationship with Iran. Russia matters, but not as the central Hormuz power. Russia does not depend on the Strait of Hormuz for its principal export lifeline. In fact, a tense Hormuz can lift energy prices and improve Moscow’s bargaining position. Russia can support Iran diplomatically, frustrate Western resolutions, and use the crisis as leverage in Ukraine, sanctions and Arctic discussions. But it is not the largest exposed consumer, nor the naval guarantor of the sea lane.

China is more exposed. America is more responsible. That makes them the two major powers.

The Gulf producers form the next circle. Saudi Arabia, the UAE, Qatar, Kuwait, Iraq and Bahrain cannot live with a system in which every outward cargo becomes a political negotiation. Saudi Arabia and the UAE have partial bypass options, but not enough to replace the Strait of Hormuz. The EIA estimates that only about 2.6 million barrels per day of available Saudi and UAE pipeline capacity could be rerouted around the Strait of Hormuz during a disruption. Saudi Arabia’s East-West pipeline has a nominal capacity of 5 million b/d, temporarily expanded to 7 million b/d in 2019, while the UAE pipeline to Fujairah is about 1.8 million b/d. Iran’s Goreh-Jask system has an effective capacity of around 300,000 b/d but has seen limited actual export use.

Fujairah and Yanbu provide some relief, and Jask offers limited benefit to Iran. However, none fully address the challenges posed by Hormuz.

For India, the issue is not merely theoretical. India is a strong regional naval power in the Indian Ocean and an increasingly important maritime actor in the wider Indo-Pacific. But Hormuz sits within a heavily militarised Gulf security architecture, where Iran and Oman hold immediate geographic leverage, Gulf producers face export vulnerability, and the United States remains the principal external naval guarantor. As a major energy importer, refining centre, emerging maritime power and stakeholder in Gulf stability, India would be directly affected by any Hormuz arrangement that grants Iran selective discretion, China privileged access, or the United States unilateral operational control. Such outcomes would influence India’s crude sourcing, freight costs, insurance, refinery planning and strategic autonomy. However, India’s sheer scale as a leading importer of Gulf energy also gives it significant potential influence over the future regime. By leveraging coalitions with other major Asian importers and European stakeholders, as well as utilising economic incentives tied to market access or long-term contracts, India could help encourage an open, rules-based outcome. Strategic engagement with Gulf producers and diplomatic partnerships with fellow import-dependent states would allow India to move from a reactive position to a proactive role—shaping the negotiation landscape and demonstrating that major consumers have agency in determining the rules governing this critical chokepoint.

India’s preference would therefore be consistent with New Delhi’s stated position: unimpeded freedom of navigation and the global flow of commerce through the Strait of Hormuz must prevail. Any Hormuz arrangement acceptable to India would have to protect open merchant shipping, avoid discriminatory tolls or permits, and prevent the Strait from becoming either an Iranian leverage point or a Chinese energy corridor managed through private understandings. India’s Ministry of External Affairs stated on 8 April 2026 that it expected “unimpeded freedom of navigation and global flow of commerce” to prevail through Hormuz.

India’s position should therefore be clear. It should support a rules-based Hormuz mechanism, not an Iranian toll booth. It should support traffic safety, VTS, pollution control, emergency response and mine-clearance coordination. It should oppose discriminatory charges, selective passage based on political alignment, compulsory Iranian permits, and any great-power bargain that excludes major Asian consumers.

To operationalise these principles, India should take several concrete steps:

• Launch a sustained diplomatic initiative with Iran, Oman, and Gulf Cooperation Council states to advocate for an internationally supervised governance mechanism for Hormuz that protects free navigation and rejects unilateral tolls.
• Establish a coalition with other major energy importers, including Japan, South Korea, and the European Union, to present a united front in negotiations and discourage any arrangement that restricts passage or imposes discriminatory charges.
• Table formal proposals at the International Maritime Organisation and the United Nations, calling for joint maritime monitoring, transparent service fee structures, and regular multilateral consultations to oversee Strait operations.
• Develop bilateral and regional frameworks for real-time information sharing, risk assessment, and incident response among affected commercial and maritime stakeholders.

By pursuing these actions, India can strengthen its influence in future Hormuz arrangements and ensure its interests are protected in both diplomatic and operational terms.

The main lesson for Indian maritime strategy is clear: without control over tankers, insurance, escorts, intelligence, and legal frameworks, a country becomes subject to external control at strategic chokepoints.

A workable Hormuz arrangement would therefore need to avoid three traps.

The first trap is the Iranian sovereignty trap. Iran may claim that geography gives it the right to manage. Geography gives Iran influence, not ownership of the international strait. UNCLOS recognises that strait states retain sovereignty or jurisdiction over their waters, but that sovereignty is exercised subject to the transit-passage regime and other rules of international law.

The second trap is the American militarisation trap. Washington may think that naval power alone can restore confidence. But shipping confidence is not restored by firepower alone. It is restored by predictable risk, insurance cover, neutral rules, escort availability, port acceptance, charterparty certainty and reliable information. A carrier can deter missiles, but it cannot, by itself, make a war-risk underwriter comfortable.

The third trap is the Chinese neutrality trap. Beijing may pretend it is merely calling for peace. In reality, China would want a Hormuz regime that keeps energy flowing while limiting U.S. military dominance. China’s ideal outcome would be free commercial passage, no tolls, no disruption, reduced American coercive leverage, and no precedent that could later be used against China in the South China Sea.

For this reason, a Hormuz-Montreux agreement would be significantly more complex than the original Montreux Convention.

Montreux gave Turkey a recognised position over a strait connecting a semi-enclosed sea to the Mediterranean. Hormuz sits at the centre of oil, LNG, sanctions, Iran’s survival strategy, Gulf monarchy security, U.S. naval power, Chinese energy demand, Indian import security and global inflation. It is not only a maritime passage. It is a floating balance sheet of the world economy.

If such an agreement ever comes into being, it will probably not be called the Hormuz Convention. That name would sound too dramatic. It may emerge as a “Protocol on Safe Navigation in the Strait of Hormuz,” deposited with the IMO, endorsed by the UN, guaranteed by Gulf states, and quietly blessed by Washington and Beijing.

The language of any agreement may appear technical or unremarkable. Its consequences would be anything but.

The agreement would say that merchant vessels have unimpeded passage. It would say no charges shall be levied merely for passage. It would permit service fees for specific services. It would establish reporting points. It would create a joint maritime coordination cell, possibly in Oman. It would involve Iran and Oman as coastal states, Gulf exporters as stakeholders, and external powers as guarantors. It would avoid saying “warships need permission,” but it might foster a culture of notifications. It would avoid saying “Iran controls Hormuz,” but it may give Tehran enough dignity to claim victory domestically.

Strategic concessions are typically articulated through detailed legal clauses rather than overt slogans.

The danger is that once a natural strait becomes monetised, even indirectly, the world enters a different maritime age. For centuries, the great trading powers fought to keep natural sea lanes open. Canals could charge because they were artificial works. Ports could charge because they offered services. But natural straits were not meant to become private turnstiles of coastal states. That distinction is now central to the Hormuz debate: tolls are a political charge for passage, while genuine service charges must be tied to real navigational or safety services and must not become a disguised tax on movement through an international strait.

This is the boundary that any Hormuz arrangement must respect. The most realistic future is therefore not a full Montreux for Hormuz. It is a soft Montreux without the name.

Iran gets recognised as a necessary security actor, but not as the owner of the Strait. Oman becomes the neutral hinge. The United States keeps the principle of free navigation. China secures energy flow without formally joining an American-led order. Gulf exporters obtain predictability. India, Japan and South Korea get reduced risk, provided they are not excluded from the consultation table. The IMO gets a technical role. Insurers have a framework for pricing risk. 

To ensure that India is not marginalised or excluded from key decisions, it must develop concrete mechanisms to secure a seat at the consultation table. India can achieve this by proactively building formal alliances with major energy importers such as Japan, South Korea, and EU states, creating a unified front that cannot be easily bypassed. Additionally, India should leverage its active participation in forums such as the International Maritime Organisation and the United Nations to press for official observer or stakeholder status in any negotiations. By coordinating positions with like-minded states, proposing joint statements on Hormuz governance, and insisting on transparent, multilateral consultations as a precondition for any new regime, India can assert its role as an indispensable party to any durable arrangement on the Strait. Such measures will directly address the risk of exclusion that concerns policymakers and reinforce India's influence during the negotiation and implementation of any Hormuz agreement.

The international community may proceed as if no fundamental change has taken place. However, a substantive shift would have occurred.

• The old order said the seas are open because law says so, and the U.S. Navy guarantees it.
• The emerging order may say the seas are open because coastal states, user states, insurers, navies and energy buyers have negotiated the price of predictability.

This is the underlying significance of a Hormuz-Montreux arrangement. The issue extends beyond Iran, tankers, or even oil. It is about the slow movement from freedom of navigation as a universal principle to freedom of navigation as a negotiated service. 

This is why Hormuz is important. The concern is not its potential closure, but the possibility that it may reopen under new rules that alter the concept of open seas.

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