Iran Charges Up to $2 Million Per Transit Through Strait of Hormuz

Insights

• Iran’s IRGC has been demanding up to $2 million per commercial voyage through the Strait of Hormuz, according to industry reporting.
• An Iranian lawmaker confirmed the toll on state television and parliament is drafting legislation to formalize transit fees.
• Tehran moved from a March 2 blanket closure to a selective blockade that requires IRGC permits for approved transits.
• Commercial crossings through Hormuz have fallen about 95 percent since the conflict began, forcing many ships to reroute around the Cape of Good Hope.
• Saudi Arabia and other Gulf producers have lost access to primary Gulf export terminals and are shifting limited flows to Red Sea and pipeline routes.
• China, India, Japan, Pakistan, Iraq, Malaysia, and Syria are among countries negotiating or securing bilateral transit arrangements with Iran.
• Iran signed but never ratified UNCLOS, creating a disputed legal basis for its tolls while many legal scholars argue transit passage is customary international law.
• Insurance withdrawals and longer reroutes have added substantial costs and delays to shipping and contributed to oil price volatility above $100 per barrel.