How Iran could try to control the Strait of Hormuz – and profit from it

London — When the U.S. and Israel launched their joint war on Iran in February, Tehran responded almost immediately with what has now been proven to be one of its most potent weapons — the ability to paralyze the Strait of Hormuz.

By firing on or threatening to strike any ships that had not sought its permission, Iran effectively closed this major shipping lane, through which a fifth of the world’s oil had typically passed in tankers. The shipping gridlock sent the price of oil soaring, impacting virtually everyone on the planet, including Americans who continue to face elevated prices at the pump.

Transits have steadily increased since the signing of the memorandum of understanding between the U.S. and Iran two weeks ago. That framework agreement calls for the lifting of U.S. and Iranian restrictions and toll-free transit of the strait for at least 60 days, a period designated by the MoU for the U.S. and Iran to negotiate a wider peace deal.

But some experts believe that whatever deal the two sides may eventually reach, the Strait of Hormuz will never return to its pre-war state.

“We are no longer dealing with the traditional maritime arrangement in the Strait of Hormuz, which we are familiar with, the one that existed before the war,” Noam Raydan, a senior fellow at the Washington Institute think tank, told CBS News. “This new navigational order has been created by Iran, and what Iran is trying to do right now is ensure that it plays a central role in it.”

International maritime laws, and precedents set in other, comparable waterways, could provide some clues as to the possible future of the Strait of Hormuz. 

Fees, tolls or insurance?

Iran has repeatedly signaled an intention to impose some charge on vessels transiting the Strait of Hormuz after the 60-day negotiation period set out in the MoU.

Last week, the governments of Iran and Oman — the two nations with coastlines in the strait — said in a joint statement that future management of the waterway would have “costs associated,” but that they would be in line with international standards.

There are fees imposed for the use of other vital shipping lanes, including the Suez and Panama Canals, where fees can amount to hundreds of thousands of dollars for the largest cargo vessels. 

But those canals are man-made, not natural chokepoints, like the Strait of Hormuz, and both Egypt and Panama were given explicit permission in treaties to charge tolls, and the canals are subject to international agreements that guarantee freedom of navigation to any vessel. 

Meanwhile, Turkey charges service fees for ships transiting the Bosporus and Dardanelles Straits, which are natural chokepoints, under the 1936 Montreux Convention. That law predates the much wider United Nations Convention on the Law of the Sea (UNCLOS), which took effect in 1994, giving ships the right of innocent passage through any country’s territorial waters without paying a fee. 

Iran signed, but has never ratified UNCLOS.

The Montreux Convention obligates Turkey to allow commercial ships freedom of passage, but allows the country to charge for some specific things, including sanitary, pilotage, towage and lighthouse services.

Several days after Oman issued the joint statement with Iran, Omani Foreign Minister Badr bin Hamad Al-Busaidi denied “any ambiguity” on the issue of transit fees, insisting that there would be none, but he did not rule out fees for navigational, environmental or other “services,” modeled on the Straits of Malacca and Singapore, where pilotage service fees are voluntary. 

Alternatively, the Persian Gulf Strait Authority (PGSA), an agency created by Iran during the war that the regime claims has sole responsibility for regulating traffic through the vital waterway, has floated plans to require ships to take out an insurance policy to cross the strait. 

The U.N.’s International Maritime Organization quickly refuted that concept, however, saying the demands were not official.

A deal to be done? 

Some experts believe Iran could be convinced not to try to impose charges on the strait if the U.S. agrees to lift sanctions on Tehran.

“There is an inverse correlation between Iran’s ability to secure sanctions relief and its desire to look at the strait as a source of revenue,” Ali Vaez, director of the Crisis Group think tank’s Iran Project, told CBS News.

“The more the Trump administration ensures that Iran can get access to frozen funds and is able to repatriate revenue from its oil sales, the less Iran would need to make money through imposing fees for transiting the Strait of Hormuz,” he said. 

A regional approach to management of the strait could include not only Iran and Oman, but other key countries in the region, and possibly even those that have acted as mediators between Tehran and Washington, such as Pakistan, Qatar, Saudi Arabia, Turkey, and Egypt. 

“They might come up with an arrangement that doesn’t apply to some or most of the countries in the region, certainly not any of the littoral states” in the Gulf,” Vaez said. 

Iran could also try to impose a system that exempts countries in the so-called global south, allowing their vessels to transit for free while charging fees to richer nations, Vaez said. 

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