- 2 months ago
Oman has long been recognized as one of the most strategically important countries in the Gulf, not because of military power, but because of diplomacy, geography, and careful statecraft.
When tensions between the United States and Iran escalated, Oman did not respond with confrontation or ideological alignment.
Instead, it used its unique position to strengthen its international relevance, reinforce its role as a trusted mediator, and protect its own economic and political interests.
When tensions between the United States and Iran escalated, Oman did not respond with confrontation or ideological alignment.
Instead, it used its unique position to strengthen its international relevance, reinforce its role as a trusted mediator, and protect its own economic and political interests.
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LifestyleTranscript
00:00In every war, everyone loses money. But in 2026, when America and Iran went to war,
00:05one tiny country made money instead. Its docks got busier, its trade doubled,
00:09its budget flipped to profit. This is how Oman turned the world's most dangerous crisis into
00:13its biggest win. The Drab
00:15The trouble began on February 28, 2026, when the United States and Israel struck Iran.
00:22That was the spark. Iran did not just strike back at the people who hit it. It reached for
00:26the one weapon it had been holding for decades. It reached for the water. That water is called
00:30the Strait of Hormuz. If you have never heard of it, here is all you need to know. It is
00:33a narrow
00:33channel between Iran on one side and Oman on the other, and it is the only way oil ships can
00:38sail
00:38out of the Persian Gulf and into the open ocean. Roughly a quarter of the world's seaborne oil
00:42trade squeezes through this one tiny gap. Choke it, and you choke the world. To really feel it,
00:47picture the traffic. Day after day, an endless line of giant tankers crawls through the single
00:51narrow lane, each one loaded with the fuel that keeps factories running, planes flying and homes
00:55warm on the other side of the planet. There is no easy way around it and no back road for
00:59most of
01:00these ships. For the countries trapped inside the Gulf, this one gap is the only way out to the
01:04open sea. So when Iran decided to shut it, it was not just closing a door. It was reaching a
01:08hand
01:08around the throat of the global economy and slowly beginning to squeeze. So Iran choked it. Tehran
01:14declared the Strait closed, warned ships away, and began hitting vessels that tried to pass.
01:19Almost overnight, one of the busiest shipping lanes on the planet went quiet. Tankers stopped.
01:23Traffic through the Gulf slowed to a near standstill. And the world felt it fast. When a quarter of the
01:27planet's oil suddenly cannot move, prices do not rise gently. They jumped. Oil surged,
01:32sending shockwaves through global markets. Fuel got more expensive at the pump in countries
01:36thousands of miles away. A war between two nations became a bill that landed in everyone's mailbox.
01:42And that is what made this crisis so dangerous. It did not stay in the Gulf. It reached into the
01:46wallet of a driver filling up in another country entirely. It touched the price of goods on shelves in
01:51cities that could not even find Hormuz on a map. When you control that much of the world's oil with
01:54a single stretch of water, every move you make is felt everywhere at once. Iran knew that,
01:59and that was the whole point. The Strait was not just a piece of geography. It was leverage,
02:03and Iran was pulling on it hard. Now here is the part that matters for our story.
02:07Iran and the United States were not the only players sitting on this water. Oman was there too.
02:12The Strait of Hormuz does not belong to Iran alone. The channel runs between Iran to the north and
02:16Oman's Musindam Peninsula to the south, and at its narrowest points the water falls inside the
02:21territory of both countries. In other words, Oman owns half of the most important door in the world.
02:25And that fact was about to change everything. But to understand what Oman did next, you have to
02:30understand what Oman is. Because Oman is not like the other Gulf states. It does not pick sides.
02:35It has spent decades building a reputation as the one country in the region that everyone can talk to.
02:40The Omanis have a name for it. They call it active neutrality, or sometimes they put it even more
02:45simply. Friends to all, enemies to none. And they mean it. This is a country that manages to be close
02:50to the United States and close to Iran at the very same time. A trick that should not be possible.
02:55And yet Oman has pulled it off for years. On one side you have the Americans. Oman has long given
02:59the US military access to its ports, including its deepwater facilities at Duckham, and it hosts
03:04regular US Navy visits. Washington sees Oman as a quiet, reliable partner in a loud, unreliable
03:11neighborhood. On the other side you have Iran. And the bond there is even older.
03:14Back in the 1970s, when a rebellion threatened to tear Oman apart, it was Iran that sent soldiers
03:19to help the sultan hold his ground. The two countries also signed a maritime border agreement
03:23in 1974 to share and manage the waters of the strait between them. That history built a trust
03:28that never fully broke, not even after Iran's revolution, not even through decades of tension.
03:33Through it all, Oman kept its channels to Tehran open. And Oman did not just keep the peace at home.
03:39It became the region's quiet fixer, the backroom where enemies could meet without cameras.
03:43When the world wanted a nuclear deal with Iran back in 2015, it was Oman that hosted the secret
03:47talks that made it possible. And when Saudi Arabia and Iran, two bitter rivals, finally
03:52shook hands in 2023, Muscat had helped smooth the path. Time and again, when two sides could
03:57not stand to look at each other, Oman was the room where they sat down. So now put it all
04:02together, and you can see the trap closing. Here is a country that shares the most dangerous
04:06water in the world with Iran. A country that is friends with the very superpower that just
04:11bombed Iran. A country whose whole reputation, whose whole value, rests on being trusted by
04:16both sides at once. And suddenly those two sides are at war, firing across a sea that
04:20Oman half owns. Every instinct says this is a disaster. Stay too close to America, and
04:25Iran feels betrayed on Oman's doorstep. Stay too close to Iran and Washington turns on you.
04:30Pick either side and you lose the one thing that makes you special. Pick neither, and you look
04:34weak while missiles fly overhead. And do not forget what all of this was really threatening.
04:38It was not just Oman's safety. It was Oman's entire identity. For decades, the country had
04:42built its place in the world on one simple idea that it could be trusted by people who
04:46trusted no one else. That reputation took a lifetime to build, and a war like this could
04:50burn it down in a single season. One wrong step, one moment of looking too close to America
04:54or too close to Iran, and the magic would be gone. The room where enemies met would empty
04:59out, and a small country that had always punched far above its weight would suddenly be just
05:04another small country. And it got worse. Even as the war raged, Oman kept its doors open
05:08to Iranian officials, hosting Tehran's foreign minister for talks while other Gulf states leaned
05:13hard toward the American and Israeli side. To the world, that looked like Oman clinging
05:17to a sinking friendship. To Washington, it looked like something worse. This was the corner
05:22Oman found itself in. Small, exposed, caught between a giant and a superpower with its most valuable
05:27asset, its trust, being pulled apart from both ends. Most countries in that spot would
05:32just try to survive, keep their heads down, wait for the storm to pass, and hope to still
05:36be standing when it cleared. Oman did something else. Oman looked at the exact same disaster
05:41everyone else saw, the closed water, the frozen ships, the two furious powers, and it saw something
05:46no one else was looking at. It saw an opening, and to find it, all Oman had to do was
05:51look
05:51at a map.
05:52The Windfall
05:53Here is the secret hiding in plain sight. The one fact that turned Oman's nightmare into
05:58Oman's payday. When Iran slammed the door on the Strait of Hormuz, it trapped almost
06:02every oil port in the Gulf behind that closed door. Saudi Arabia, Kuwait, Qatar, Bahrain,
06:08Iraq, and much of the United Arab Emirates. All of them load their ships inside the Persian
06:12Gulf. All of them have to sail out through that one narrow gap, and that gap was now a
06:16war zone. But not Oman. Look closely at the map, and you see it. Oman's biggest ports,
06:21Sohar, Dukkam, and Salalah, do not sit inside the Gulf at all. They sit on the outside, on the Gulf
06:25of Oman and the open Arabian Sea, past the choke point entirely. Only one small sliver
06:30of Omani land, the Musendam Peninsula, touches the Strait itself. The rest of the country faces
06:35the free and open ocean. Take a second to really sit with that, because it is the hinge
06:39the entire story turns on. Geography does not care about politics. It does not care who
06:44is angry at whom. It simply is. And for once, the cold, unchanging shape of the coastline
06:48was handing Oman a gift that no amount of money or diplomacy could have bought. Its rivals had
06:53built their fortunes inside a locked room. Oman had built its ports out in the open air.
06:57Do you see what that means? While every other Gulf port was locked behind a door Iran controlled,
07:02Oman's ports were on the safe side of that door. The war closed the front gate, Oman owned the back
07:07gate, and the whole world came knocking. As Hormuz froze, ships had nowhere to go, so they turned
07:11toward Oman. Traffic through the Gulf of Oman ports surged, with cargo unloaded there and then trucked
07:16overland to destinations like Dubai and Abu Dhabi. Oman's docks became the emergency exit for an entire
07:22region. When the main road closes, everyone piles onto the side street, and Oman owned the side
07:27street. And the numbers on that side street were staggering. Think about the other Gulf countries
07:31for a second. Their exports were collapsing. Their ships were stranded. But their goods still
07:35needed to reach buyers somehow, and the only way out ran through Oman. So Oman handled it for them.
07:39Since the war began on February 28, Omani ports saw a 117% jump in the exports they handled on
07:45behalf of
07:46other Gulf states, more than double. In the middle of a war that was crushing its neighbors,
07:50Oman's ports were working harder than ever. Let that picture sink in. In the same weeks that
07:55Saudi tankers sat idle and Iraqi oil had nowhere to go, the cranes in Oman were swinging around the
07:59clock. Trucks lined up at the gates. Warehouses filled and emptied and filled again. The disaster
08:04that had frozen an entire region solid had turned Oman into the busiest crossroads in the Gulf. What
08:08was a wall for everyone else had become a gateway for Oman, and the whole neighborhood was lining up
08:13to pay it to hold that gate open. Then there was Iran itself. Cut off, sanctioned,
08:17and desperate for stable trade routes. Iran needed a partner it could trust,
08:20one whose ports were not being blockaded or bombed. It turned to the friend it had helped
08:24decades before. Trade between Iran and Oman shot up by roughly two and a half times,
08:29climbing from around $2 billion toward nearly $5 billion. Iranian importers stopped routing
08:34their goods through the more exposed and risky ports elsewhere in the Gulf, and started running them
08:38through Oman instead. The war did not shrink Oman's business with Iran. It supercharged it.
08:43And we have not even talked about the oil yet. Remember how the closed strait sent oil prices
08:48soaring? Well, here is the twist. Oman still had oil to sell, and it could still ship it out because
08:52its own oil left through those same safe ports outside the strait. So while other producers were
08:57watching their exports rot at the dock, Oman was loading up its tankers and selling into a market
09:01where prices had gone through the roof. Oman's oil exports actually surged compared to before the war,
09:07even as exports from the rest of the Gulf and Iraq shrank. It is a brutal kind of luck. The
09:11very
09:11disaster that was draining everyone else was filling Oman's pockets, because Oman could still
09:16open the tap while the price was high. There is an old and slightly cruel truth in the oil
09:20business. The best time to have oil to sell is the moment when everyone else suddenly cannot sell
09:25theirs. Scarcity is what drives the price, and a war in the Gulf created scarcity like almost nothing
09:30else on earth. Most of the region got only the pain of that scarcity, the danger and the losses,
09:34with none of the reward. Oman got both sides of the coin. It felt the danger, yes, but it also
09:39collected the reward, because it was one of the very few countries that could still get its barrels to
09:44market. And the money changed the whole country's story. Before the war, Oman was staring at a
09:48budget deficit. It was going to spend more than it earned. Then the war hit, the oil money poured
09:52in and the numbers flipped. That expected deficit turned into a surplus. The current account swung
09:56positive, foreign reserves grew and the country's debt eased. A nation that was tightening its belt
10:00suddenly had cash to spare. Three separate windfalls all at once. Higher oil prices on the sales it could
10:06still make. A flood of diverted cargo from its neighbors, and a booming new trade with Iran,
10:10stack them together, and you understand how a small country came out of a regional war richer
10:15than it went in. For a nation that had spent years worrying about its budget, watching its debt,
10:19and wondering how to pay for the future, this was a turning point that arrived almost overnight.
10:23Not through some clever new tax. Not through years of careful saving. But because the map had placed it
10:28in exactly the right spot at exactly the wrong moment for everyone else. Sometimes fortune is earned,
10:32and sometimes it simply arrives at your door, and the only skill that matters is being ready to open
10:37it when it does. Oman was ready. Now I want to be honest with you, because this is where a
10:41lot of
10:41stories would lie to you and tell you it was all easy. It was not. Oman did not float above
10:46this war
10:47untouched. It got hit too. As the fighting spread, Iran launched drone strikes at Oman's own ports,
10:52including Dukham and Salalah. One of those attacks came in the early hours of a March morning,
10:56when a drone struck the port of Salalah and damaged a terminal. Other strikes crashed near Salalah
11:00and hit a fuel storage tank at Dukham. Part of the reason Oman was targeted is uncomfortable.
11:05Some of those ports were being used to help American logistics, and that put a target on them.
11:09So this was not a country sitting safely on the sidelines counting cash. This was a country taking
11:14real hits, absorbing real damage, and pausing operations while the smoke cleared. But here is
11:19the remarkable part. Even after Iranian drones fell on Omani soil, the friendship held. The strikes
11:24caused damage, but the relationship between Oman and Iran did not break down. Think about how strange
11:28that is. Your neighbor's weapons hit your ports and you still keep talking to them, still keep
11:32trading with them, still keep the door open. Most countries would have slammed that door and never
11:36looked back. Oman did not. And that patience, that refusal to overreact was not weakness.
11:41It was the whole strategy. Because Oman understood something the angrier states did not. This war was
11:46going to end one day. And when it did, someone was going to have to decide who controls that precious
11:51water and how it gets managed for the next 50 years. Oman did not want to just survive the war.
11:56It
11:56wanted to be holding the keys when the war was over. So while the money was still rolling in,
12:00Oman started playing a much bigger game. It stopped thinking about how to cash in on the chaos of
12:04today and started thinking about how to own a piece of the piece tomorrow. It was about to take the
12:08busiest water in the world and try to turn it into something no one had ever quite managed before.
12:13A permanent source of income, with Oman's name on the deal.
12:16The Play
12:17By the middle of June 2026, the fighting had cooled just enough for the world to catch its breath.
12:22A framework agreement, a memorandum of understanding, took shape, opening a temporary
12:27window of free passage through the strait while the two sides kept negotiating over what came next.
12:31But that agreement settled almost nothing about the water itself.
12:35It left the future of the strait dangerously vague, opening the door to fights over transit
12:39fees and who really controls navigation. And a vague question with billions of dollars riding on,
12:45it is exactly the kind of opening a clever, patient country waits for. Oman stepped through it.
12:50Here was Oman's move, and it was a genuinely smart one. After the war, Oman floated a plan
12:54for ships to pay into a fund for passing through the strait, a system it would run together with
12:58Iran. For the first time, the two countries that share this water started seriously negotiating a
13:03pay model for the Strait of Hormuz. Imagine that, a waterway that had been free forever,
13:07and now the coastal states were talking about turning it into a stream of income.
13:11But Oman knew it had to be careful, because there is a very old rule in international law.
13:15You cannot simply charge a toll to use a natural sea passage the way you charge to use a bridge
13:20or
13:20a canal. Do that, and the whole world calls it illegal. So Oman built its idea around that rule
13:25instead of against it. The pitch was clever. Oman said it was not talking about a toll at all.
13:29It was talking about paying for services, keeping the water safe, protecting it from pollution,
13:33and responding to emergencies all cost real money. So the idea was a fund to cover those costs,
13:38modeled loosely on a system already used in the Strait of Malacca in Asia. Not a fee to pass.
13:42A fee to be protected while you pass. It is a small difference in words and a huge difference
13:46in law. And Oman's top diplomat said it out loud, in plain language. Oman's foreign minister,
13:52Syed Badr al-Buseti, made clear that no transit fees would be imposed and that the Strait must stay
13:56safe, secure and free for all. It was a masterclass in having it both ways. Oman got to look like
14:01the
14:01responsible guardian of free shipping, while quietly opening a door to future income from the exact same
14:06water. Now, everyone else at the table wanted a very different ending, and this is where it gets tense.
14:11Iran wanted to go further and harder. Tehran did not want a polite, voluntary fund. It wanted real
14:16money, and it wanted it required. Reports emerged of Iranian authorities demanding as much as $2
14:21million per passage, and Oman itself warned European officials that the Strait would not
14:25simply return to its old free status, and that ships might have to be charged. Iran held the
14:30leverage of a country that could still close the water, and it wanted to cash that leverage in.
14:34The United States wanted the opposite. Washington did not want fees of any kind. It wanted the clock
14:38turned back to how things were before the war, when ships sailed free and no one paid a cent.
14:43The US pressed Iran to publicly declare the Strait open, and to stop firing on commercial
14:47ships. To the Americans, the whole idea of monetizing the Strait was a non-starter.
14:51So look at where Oman placed itself. Iran pushing for mandatory payments on one side,
14:56America pushing for total free passage on the other, and Oman standing right in the middle with
15:00a compromise that borrowed a little from each. Voluntary, legal, service-based. Not too hot,
15:05not too cold. It was the same balancing act Oman had always played, only now the prize was a share
15:10of the busiest oil route on earth. And the fee fund was not even Oman's only idea. It went bigger.
15:15Oman worked with Iran on joint plans to manage the Strait together. Floating the concept of
15:19dual corridors, one lane running along the Iranian coast and another along the Omani coast. And to keep
15:24the talks moving, the two countries agreed to press on with discussions about the future
15:28administration of navigation through the Strait. Oman was not just asking for a cut. It was trying to
15:33help write the entire rulebook for how this water would work from now on. Of course,
15:37none of this made Washington happy. And earlier in the war, Oman had already tested America's
15:42patience in a much louder way. Back in March, as the bombs were still falling,
15:46Al Busetti published a blistering piece in The Economist, arguing that America must be pulled
15:51out of what he called an unlawful war. He did not soften it. He said flatly that the United States
15:56had
15:56lost control of its own foreign policy, letting Israel drive it into a fight it should never have started.
16:01For a country that calls America a friend, that was a stunning thing to say in public.
16:05And Washington did not forget it. The relationship with the Trump administration grew cold. Oman
16:10resisted American pressure to cut its ties with Iran, insisting it was only working
16:14with Tehran on a future system for the Strait. At one point the tension boiled all the way over.
16:18A US official said Oman had been removed from its role mediating with Iran, claiming Muscat had acted
16:23very duplicitously. The trusted go-between had been shoved out of the room by one of the two sides it
16:29was
16:29trying to help. That was the real cost of Oman's game. This was never a clean, risk-free win.
16:34Oman took drone strikes on its ports. It took threats and cold shoulders from Washington. It
16:38gambled its most precious asset, its trust, and there were moments it looked like it might lose
16:42that bet entirely. Watch what Oman did with that pressure. It did not fold. Even as Washington
16:47pushed, Oman kept talking to Tehran, and it worked alongside partners like Qatar to keep pressing for
16:52ways to reopen the Strait. It refused to fully pick a side, and by refusing, it kept its value.
16:57Because a mediator who has taken sides is no mediator at all. The whole point of Oman is that
17:01it stays useful to everyone, and it protected that usefulness even when both giants were leaning on
17:06it. And that patience paid off in the most important way of all. When the framework deal
17:09was finally drawn up, it did not hand the future of the Strait to Iran alone, or settle it in
17:14some
17:14distant capital. The agreement pointed the future of the waterway toward negotiations involving Iran,
17:19Oman, and the other Gulf states. Read that again. In writing on paper, Oman had secured a
17:23permanent seat at the table that will decide the fate of the most important water in the world.
17:27That is the prize. Not just the cargo, not just the oil money. A guaranteed place in every
17:32conversation that comes next. Now I am not going to pretend this all ended in a neat,
17:36happy bow, because it did not. The peace was fragile. The framework began to fray as fighting
17:40flared again over the waterway, and the fragile Iran deal started to unravel. Trump, for his part,
17:45insisted the Strait of Hormuz completely open for business, but US blockade of Iran's ports will
17:50remain in place. As of the middle of 2026, whether Oman's fee fund and dual corridor dreams
17:55ever fully come true, is still an open question. Thank you for watching.
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