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PoliticsAI Desk•3 views

Iran's Hormuz Toll Plan: New War Demand for Billions

Iran has demanded sovereignty over the Strait of Hormuz as part of ending the war, seeking to impose tolls on the vital shipping lane to generate billions in revenue. This strategy emerged from the success of disrupting global trade, with potential monthly earnings rivaling the Suez Canal. International actors, including the US and G7, have rejected the plan as illegal and dangerous, citing violations of international maritime law. Legal experts confirm that charging fees in an international strait is prohibited under customary law. Iran is testing controlled passage systems, but details remain unclear, and the shipping industry continues to face paralysis. The move aims to offset economic losses from sanctions but faces significant global opposition.

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Iran's Hormuz Toll Plan: New War Demand for Billions

Iran has introduced a new demand to end the ongoing conflict: formal recognition of its sovereignty over the Strait of Hormuz, aiming to monetize the strategic waterway by imposing tolls that could generate billions in annual revenue.

Background on the Demand

  • Iran added sovereignty over the Strait of Hormuz to its war-ending demands this week, marking a shift from previous focuses on sanctions relief and nuclear rights.
  • The strait is a critical chokepoint, with about one-fifth of global oil and liquefied natural gas (LNG) shipments passing through it.
  • Iranian attacks have already disrupted shipping, causing global energy market turmoil and highlighting the strait's leverage.

Proposed Toll System

  • Iranian lawmakers are considering a bill to require transit fees for vessels using the strait for fuel and goods.
  • The Islamic Revolutionary Guard Corps has established a registration system for approved vessels.
  • Advisers to the supreme leader have proposed a "new regime" for the strait post-war, tying access to geopolitical disputes.
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International Reactions

  • US Secretary of State Marco Rubio and G7 foreign ministers condemned the plan as illegal, unacceptable, and dangerous to global navigation.
  • They emphasized the "absolute necessity" of restoring toll-free freedom of navigation.
  • Legal experts, such as Professor James Kraska, assert that international law, via UNCLOS principles, prohibits coastal states from charging fees in international straits like Hormuz.

Economic Potential

  • CNN calculations estimate potential daily revenues of $20 million from oil alone at a $2 million fee per tanker, rising to over $800 million monthly with LNG included.
  • This could rival monthly earnings from Egypt's Suez Canal, which typically generate $700-$800 million.
  • Revenues might offset 15-20% of Iran's monthly oil export revenue from 2024, helping mitigate sanctions-driven economic shortfalls.

Current Shipping Situation

  • Ship-tracking data shows some tankers using routes closer to Iran's coast, suggesting coordinated passage.
  • Lloyd's List reports over 20 vessels used a new corridor, with at least two understood to have paid fees around $2 million each.
  • No country, importer, or ship operator has publicly acknowledged payment, and the shipping industry remains in paralysis due to disruptions.
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