Thursday 16 April 2026
Iran is charging ships $2 million to transit the Strait of Hormuz. The IRGC toll system, safe passage countries, oil price impact, and what it means for Saudi Arabia and global trade.
by Abdul Mohammed link: houseofsaud.com
UBAI — Iran has begun charging commercial vessels up to $2 million per voyage to transit the Strait of Hormuz, Bloomberg reported on March 24, transforming the world’s most critical maritime chokepoint into a wartime toll road controlled by the Islamic Revolutionary Guard Corps. The ad hoc fee regime, confirmed by an Iranian lawmaker on state television, marks the first time a nation has imposed unilateral transit charges on an international strait in modern maritime history — and Tehran’s parliament is now drafting legislation to make the toll permanent.
The charges carry consequences far beyond shipping invoices. Saudi Arabia, the world’s largest oil exporter, has already lost access to approximately 60 percent of its pre-war export capacity through the Gulf since Iran closed Hormuz on March 2. If codified into law, the toll would enshrine Iranian control over a waterway that carries roughly 20 percent of global oil supply, rewriting the rules of maritime commerce in the Middle East and threatening the energy security of every Gulf producer.
Iran is demanding payments of as much as $2 million per voyage from commercial vessels seeking passage through the Strait of Hormuz, according to Bloomberg, citing people familiar with the matter. The fees are being collected by the IRGC Navy, which has controlled access to the strait since declaring it closed to enemy shipping on March 2. At least two payments have been settled in Chinese yuan, according to Lloyd’s List Intelligence, though some vessels — including Indian LPG carriers — appear to have received free passage as a diplomatic concession. India’s privileged access to the strait has become a central tension in the Modi-MBS diplomatic balancing act, as New Delhi benefits from a blockade that damages Saudi oil exports.
Lloyd’s List has tracked 26 ships using the IRGC’s pre-approved corridor in the two weeks since March 13, with the majority Greek-owned but others Indian, Pakistani, Chinese, and Syrian-flagged. An additional eight large vessels operated with their AIS transponders switched off during transit, according to Al Jazeera, suggesting the true volume may be higher than tracking data indicates.
Iranian lawmaker Alaeddin Boroujerdi confirmed the toll on state broadcaster IRIB, stating that “collecting $2 million as transit fees from some vessels crossing the strait reflects Iran’s strength.” He added that “now, because war has costs, naturally we must do this and take transit fees from ships passing through the Strait of Hormuz.” A second lawmaker, Mohammadreza Rezaei Kouchi, told Fortune that “Parliament is pursuing a plan to formally codify Iran’s sovereignty, control and oversight over the Strait of Hormuz, while also creating a source of revenue through the collection of fees.”
Tehran subsequently formalized its control over the waterway by notifying the United Nations and the International Maritime Organization that only vessels Iran deems non-hostile may transit the strait, establishing conditions that shipping analysts described as unprecedented in modern maritime law.
Greek shipowner Giorgos Prokopiou, through his company Dynacom Tankers, has emerged as the most prolific commercial operator through the blockade. Three Dynacom supertankers — the Smyrni, Shenlong, and Marathi — have transited the strait since March 1, each carrying approximately one million barrels of Saudi crude from Ras Tanura to Asian buyers. The Marathi, a 900-foot Malta-flagged vessel, was spotted near India’s Sikka port on March 27 after its third Hormuz crossing. It is not publicly known whether Dynacom paid the IRGC toll or secured separate terms.
Iran’s Parliament Moves to Formalize the Toll Into Law
While the $2 million fee is currently being demanded on a case-by-case basis, Tehran is moving to make it permanent. Iran’s parliament, the Majlis, is actively reviewing a legislative bill that would require all nations using the Strait of Hormuz for the transport of oil, liquefied natural gas, food, and other commodities to pay tolls and taxes to the Iranian government, Maritime Gateway reported.
The Majlis Civil Affairs Committee is finalizing the bill, which would recognize Tehran’s “sovereignty, dominance and supervision” in the strait while establishing a legal framework for systematic fee collection. Lawmaker Somayeh Rafiei confirmed that parliament was advancing the proposal, which frames the levy as compensation for Iran providing security along the shipping route. As of March 27, the bill’s legal team was preparing a final draft for a parliamentary vote expected the following week, according to Bloomberg.
Iran’s Acting President Mohammad Mokhber has publicly endorsed the concept. In a statement reported by Iran International, Mokhber said one of the most important opportunities created by the war was the possibility of reshaping Iran’s role in the strait, stating that “after the imposed war, by defining a new regime for the Strait of Hormuz, Iran will move from being under sanctions to a powerful position in the region and the world.”
The ambition is explicit: Iran wants to convert a temporary wartime measure into a permanent source of revenue and geopolitical leverage. For Arab oil producers in the Gulf, that prospect is existential. Even an informal toll raises issues of sovereignty, precedent, and the potential weaponization of a vital trade route for their energy exports, according to analysts tracking the OPEC fractures caused by the conflict.
Does International Law Allow Iran to Charge Shipping Fees?
The toll faces significant legal obstacles under the United Nations Convention on the Law of the Sea. UNCLOS, which 168 states have ratified, enshrines the principle of “transit passage” through international straits. Article 44 states that countries bordering such straits “shall not hamper transit passage,” and the right cannot be suspended for any reason, according to a Lawfare analysis published in March 2026.
Iran, however, signed UNCLOS in 1982 but never ratified it — a distinction that sits at the center of Tehran’s legal argument. By not ratifying the treaty, Iran contends it is not bound by its provisions, including the transit passage regime that prevents bordering states from charging tolls or restricting access to international straits.
Legal scholars are divided on the argument’s validity. The European Journal of International Law published an analysis noting that many provisions of UNCLOS are considered customary international law, binding on all nations regardless of ratification. Transit passage through international straits falls into this category, according to the Just Security analysis, meaning Iran may be violating international norms even without being a formal party to the treaty.
The practical reality is that legal arguments carry little weight when backed by the IRGC’s fast-attack boats, anti-ship missiles, and sea mines. Iran has demonstrated the military capability to enforce its toll regime, and the international community has so far been unable to reopen the strait by force. The US Fifth Fleet, Royal Navy, and coalition partners have maintained a naval presence in the region, but commercial shipping through Hormuz has collapsed regardless. The G7’s March 27 pledge to secure the strait with a multinational naval force was limited to the post-war period — an acknowledgment that no Western government is prepared to challenge Iran’s control while hostilities continue.
Hormuz Shipping Has Collapsed by 95 Percent Since the War Began
The scale of the disruption is unprecedented. From March 1 to March 25, commercial vessels made just 142 crossings through the Strait of Hormuz — a 94.6 percent decrease from the 2,652 transits recorded in the same period in 2025, according to Lloyd’s List Intelligence. Before the war, the strait handled approximately 110 transits per day, carrying 21 million barrels of oil and significant volumes of LNG, petrochemicals, and containerized goods. The entire month’s disrupted traffic equals roughly one normal day.
The collapse began on March 2, when a senior IRGC official confirmed that the strait was closed and threatened any ship that attempted to pass. Insurance underwriters immediately suspended war-risk coverage for Hormuz transits, and major shipping companies including Maersk, MSC, and CMA CGM rerouted vessels around the Cape of Good Hope, adding 10 to 14 days and an estimated $500,000 to $1 million per voyage.
The number of transits has increased slightly since mid-March as Iran transitions from a blanket closure to the toll-based selective blockade. On March 24, six vessels transited openly with AIS transponders active. But this still represents a fraction of normal traffic. The ships making the crossing are predominantly from nations that have secured bilateral deals with Tehran or are operating under informal arrangements with the IRGC.
The oil market has responded accordingly. Brent crude surpassed $100 per barrel on March 8, crashed briefly to $100 on March 23 after President Trump hailed “very good and productive conversations” with Iran — before Iran’s foreign ministry denied any dialogue and prices rebounded. By March 28, Brent had climbed to $112.57 per barrel following the Houthi missile launch at Israel and hardening positions on both sides. The surge has exceeded every previous conflict-driven price spike in modern history, including the 1973 Arab oil embargo and the 1990 Iraqi invasion of Kuwait.
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