Iran is now moving to formalize its control over the Strait of Hormuz into an official, revenue-generating toll system.
This marks a significant shift from unpredictable, ad-hoc seizures to creating an institutional framework. Iran's central bank has opened accounts in four different currencies—the rial, yuan, dollar, and euro—specifically to collect these transit fees. Furthermore, a bill titled the 'Hormuz Strait Security Plan' is set to be approved by its parliament, the Majlis. This combination of financial infrastructure and legal backing is a clear attempt to institutionalize what was once coercive, case-by-case leverage.
However, this plan directly clashes with long-standing international law. The UN Convention on the Law of the Sea (UNCLOS) protects the right of 'transit passage' through international straits, meaning ships cannot be charged simply for passing through. The Secretary-General of the International Maritime Organization (IMO) has stated there is 'no legal basis' for such fees, setting up a direct confrontation between Iran's domestic law and the global maritime order.
So, why is this happening now? The reasons can be traced back through several layers.
First, recent escalations created the perfect storm. The U.S. blockade, ongoing ship seizures, and reports of new mine-laying by Iran have made the strait incredibly risky. In this environment, Iran is essentially trying to sell 'safe passage' for a fee. The international legal pushback and U.S. threats to intercept paying ships only prompted Iran to create a more robust system with non-dollar payment channels to circumvent sanctions.
Second, this wasn't an overnight decision. Over the past few months, Iran had already been testing the waters by charging some vessels on a case-by-case basis. At the same time, war-risk insurance premiums for ships in the region skyrocketed. For some shipping companies, a predictable, even if controversial, official toll might seem more manageable than navigating unpredictable dangers and extreme insurance costs.
Third, the ultimate driver is the intense pressure from U.S. sanctions. For years, these sanctions have targeted Iran's oil revenue and its financial networks, including Chinese buyers. This explains why Iran specifically included the yuan in its new accounts and aims to eventually use its own currency and digital payment systems. It's a strategic move to build a sanctions-proof revenue stream, with potential earnings estimated in the billions of dollars annually. It's a bold gamble to monetize a critical global chokepoint, but its success remains highly uncertain.
- Strait of Hormuz: A strategically important strait connecting the Persian Gulf with the open ocean, through which a significant portion of the world's oil passes.
- UNCLOS (United Nations Convention on the Law of the Sea): An international treaty that establishes a legal framework for all marine and maritime activities.
- War-Risk Premium: An additional insurance cost charged to vessels transiting through areas with a high risk of war, terrorism, or piracy.