'Game on’: How Iran can exact a toll in the Strait of Hormuz

An Iranian marine pilot boards a Greek-owned tanker destined for Japan with Kuwaiti crude oil. The vessel’s captain has already received a clearance code over VHF radio to enter Iran’s territorial waters. The day before, the vessel’s charterer made a six-figure payment in US dollars to a bank in Oman linked to the Iranian government.

If negotiations between the US and Iran in Pakistan end with a peace deal, this process could be repeated daily, formalising Iran’s control over one of the world’s most important chokepoints, the Strait of Hormuz.

To understand how Iran could monetise its newfound control of the waterway with the US’s bitter acceptance, Middle East Eye spoke with half a dozen maritime security experts, ship owners, international law experts, and energy traders.

The first thing Iran will have to do to make transit fees palatable to the US in the eyes of the international community is change the name of what it wants to do, experts say.

“The better way to phrase it is a fee for service as opposed to a toll,” Donald Rothwell, an expert on the law of the sea at Australian National University, told MEE.

Iran effectively closed the strait after it was attacked by the US and Israel. Countries whose coasts border international straits are prohibited from restricting transit through their territorial waters, but can suspend it to belligerents and even third countries in the name of maritime security during war, Rothwell said. 

Read more: 'Game on’: How Iran can exact a toll in the Strait of Hormuz