Negotiating With Iran Is Wrong. Doing So in Oman Is Worse

The scheduled talks in Muscat between the United States and Iran on February 6 shines much needed light on the regional role of their host, the Sultanate of Oman.

Oman cannot be regarded as a trusted intermediary. While the Gulf state has always claimed neutrality, boasting about its role in helping to secure the 2015 nuclear deal between Iran and the United States, it has maintained a close strategic relationship with Iran. Currently, Oman serves as a key hub for one of Iran’s most dangerous proxies, the Houthis in Yemen.

The choice of Oman as the venue of the talks, which were originally to be hosted by Turkey, could spell trouble for American negotiators. The U.S. is pushing for a wide-ranging agenda that would include Iran’s ballistic missile program and its support for regional terror proxies, the Houthis among them. Contrastingly, Iran wants to restrict the talks to a bilateral format solely focused on its nuclear program, mediated by a state that has long enabled Iran and its proxies.

Blossoming Economic Ties Between Tehran and Muscat

Oman has long functioned as a financial artery for Iran. At a February 3 meeting with  Oman’s ambassador in Tehran, Iran’s First Vice President Mohammad-Reza Aref signaled the Islamic Republic’s desire to double bilateral trade from roughly $2.5 to $5 billion. The push builds on a preferential trade agreement ratified in September 2025, which is being implemented at an accelerated rate by both countries.

Even at the height of U.S. sanctions against Iran, Oman maintained a strong trade relationship with Tehran. As a product of the 2015 nuclear deal, the sultanate facilitated the repatriation of billions of dollars in frozen Iranian funds through Bank Muscat. Iranian banks sanctioned for financing terrorism, such as Bank Saderat and Bank Melli Iran, have continued operating in Oman, granting Tehran continued access to the international financial system.

Oman’s Support for the Patron Extends to the Proxy

The Houthis maintain an office in Muscat, headed by the group’s chief negotiator, the U.S.-designated terrorist Mohammed Abdulsalam. While the office is ostensibly intended to enable discussions between the Iran-backed terror group and interlocutors, successive rounds of U.S. sanctions have demonstrated that the Houthis use Oman to conduct financial and weapons procurement business. Abdulsalam’s network alone is valued at approximately $1 billion.

The 2025 UN Panel of Experts on Yemen reported that the two border crossings between Oman and Yemen “are regularly used to bring in items intended for military use.” Naval forces operating in and around the Gulf of Oman have seized numerous weapons shipments intended for the Houthis. UN officials believe that the group planned to transport some of these weapons through Oman. In addition to weapons smuggling, the Houthis routinely order dual-use components through companies in Oman that are then smuggled across the border.

Washington Should Target Iranian Networks in Oman

The Trump administration has chosen to negotiate with the Islamic Republic following the regime’s slaughter of reportedly more than 30,000 demonstrators. These discussions are hosted by a mediator whose bias in favor Iran’s rulers is painfully evident.

The United States should convey to Oman’s leaders that mediation requires neutrality. Concretely, this would require Oman to terminate its financial ties with Iran and other sanctioned entities. If Oman refuses to sever these relationships, the United States should investigate Omani individuals and financial institutions for sanctions evasion. While designating Iranian and Houthi leaders and financiers is important, their enablers must face consequences as well.

Ahmad Sharawi is a senior research analyst at the Foundation for Defense of Democracies (FDD), focusing on Iranian intervention in Arab affairs and the Levant. Bridget Toomey is a research analyst at FDD focusing on Iranian proxies, specifically Iraqi militias and the Houthis. For more analysis from Ahmad, Bridget, and FDD, please subscribe HERE. Follow Ahmad on X @AhmadA_Sharawi and Bridget on X @BridgetKToomey. Follow FDD on X @FDD. FDD is a Washington, DC-based, nonpartisan research institute focusing on national security and foreign policy.