Operations through the Strait of Hormuz face renewed uncertainty as Iran and Oman signal plans to impose transit fees on commercial vessels, threatening to add costs and complexity for shippers of oil and liquefied natural gas (LNG) moving between the Gulf and global markets. The strait, a 50-kilometer-wide chokepoint barely 60 meters deep, has seen a tentative resumption of traffic after a three-month blockade, but geopolitical tensions remain high.
Strategic Importance for Global Energy Trade
According to the US Energy Information Administration (EIA), the Strait of Hormuz is "one of the world's most important oil chokepoints." In 2024, an average of 20 million barrels per day of crude oil and petroleum products—about one-fifth of global consumption—transited the waterway. Additionally, around one-fifth of the global LNG trade, primarily from Qatar, moved through the strait that year. The narrow, shallow corridor between Iran and Oman's Musandam exclave is vulnerable to military intervention, a reality that became stark in February when a blockade triggered by Israeli-American attacks caused oil prices to skyrocket. Prices have since returned to pre-war levels, but the underlying instability persists.
Legal and Operational Disputes Over Transit
More than three months after hostilities began, Tehran and Washington signed a memorandum of understanding on June 17 that provided for reopening. Maritime traffic has "tentatively resumed," but control remains disputed. Iran, which has never ratified the United Nations Convention on the Law of the Sea (UNCLOS), now authorizes transit only through a single corridor along its coastline and has threatened action against vessels violating that rule. Attacks on commercial vessels have been reported in recent days, prompting retaliatory US strikes.
Iran and Oman are now considering charging ships to pass. Tehran refers to "service fees" or "insurance" rather than a toll. Marco Roscini, international law professor at Westminster Law School, told AFP in March that the transit passage regime is "widely regarded as part of customary international law" even without Iran's ratification. Dimitris Ampatzidis, an analyst at maritime tracking platform Kpler, noted that the change in terminology "may be an attempt to frame the demand in a more legally defensible way." He added that under international maritime law, charges for specific services like pollution response or navigation assistance might be permissible. Oman has suggested that such fees, modeled on similar charges elsewhere, would be in accordance with international law—likely referencing the IMO Co-operative Mechanism for the Straits of Malacca and Singapore. Ampatzidis stressed that mechanism is "based on cooperation and voluntary cost-sharing for navigation safety and environmental protection, not a precedent for a coastal state unilaterally imposing a toll."
| Aspect | Details |
|---|---|
| Chokepoint role | ~20% of global oil & petroleum products; ~20% of LNG trade (2024) |
| Key players | Iran, Oman, US, Qatar |
| Current status | Tentative resumption after MoU (June 17); still contested |
| Proposed charges | Iran/Oman consider tolls or service fees |
| Legal basis | Disputed; UNCLOS guarantees transit, but Iran not a party |
| US warning | Secretary of State Marco Rubio: "total chaos" if toll implemented |
Implications for Shippers and Operators
For freight forwarders and ocean carriers handling energy shipments, the situation demands heightened vigilance. The potential imposition of tolls could increase freight costs for tankers and LNG vessels, while the single-corridor policy may cause delays or rerouting. The recent attacks on commercial vessels underscore the security risk. While a full blockade has been lifted, shippers should expect continued volatility and consider alternative routing options, such as the Bab el-Mandeb or longer voyages around Africa, though these carry their own cost and time penalties. The dispute over legal authority means any new charges could be challenged, creating regulatory uncertainty. Operators should monitor updates from Iran, Oman, and the US, and ensure their insurance policies cover war-risk zones.
Watch List
- Ceasefire compliance: Both sides accuse each other of violations; any escalation could re-close the strait.
- US retaliatory strikes: Further attacks on vessels may provoke additional military responses.
- Toll implementation details: Whether Iran/Oman move from discussion to enforcement, and how the US reacts.
- Legal developments: Possible international arbitration or IMO involvement to clarify transit rights.
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