Iran begins collecting tolls on Strait of Hormuz despite international law concerns

This development threatens the stability of global energy markets and international shipping routes.

• On April 23, 2026, Iran began collecting tolls from vessels transiting the Strait of Hormuz, a critical maritime route.
• Traffic through the strait has plummeted by over 96%, from approximately 120 ships per day to just 4-5, due to security concerns and toll enforcement.
• International legal experts have condemned these tolls as violations of the United Nations Convention on the Law of the Sea (UNCLOS), which guarantees unimpeded transit passage.

• The Strait of Hormuz is vital for global energy, facilitating about 20% of oil and gas exports.
• Iran's toll legislation was approved amid escalating tensions with the U.S., including military strikes and attacks on shipping.
• The U.S. and UAE have condemned Iran's actions, warning of potential military responses and emphasizing the need for free passage.

Iran's decision to impose tolls on vessels transiting the Strait of Hormuz is rooted in a complex interplay of geopolitical strategy and economic necessity. The strait, which connects the Persian Gulf to the Gulf of Oman, is a crucial artery for global oil and gas shipments. Approximately 20% of the world's oil supply passes through this narrow passage, making it a focal point for international trade and energy security.

In late March 2026, amid rising tensions with the United States and ongoing military confrontations, Iran's parliament approved a bill that authorized the collection of tolls from vessels using the strait. This legislative move came after a series of military strikes and attacks on shipping, which had already significantly reduced traffic through the strait. By mid-April, daily ship crossings had plummeted from around 120 to just 4-5, a staggering 96% decrease from peacetime levels.

The Revolutionary Guard Corps (IRGC) is responsible for enforcing these tolls, which are payable in Iranian rial. Iran justifies this move by citing its sovereignty over the strait, arguing that it has the right to regulate passage through its territorial waters. However, this stance directly contradicts UNCLOS, which prohibits the imposition of tolls in international straits that are used for international navigation.

The implications of this toll imposition are profound. Shipping companies are now faced with the dilemma of either complying with Iran's demands or rerouting their vessels, which could lead to increased shipping costs and delays. The international shipping industry is already experiencing heightened insurance premiums and logistical challenges due to the reduced traffic and security risks in the region.

Moreover, the U.S. has warned that it may target vessels that comply with Iran's tolls, further complicating the situation. The United Arab Emirates has also condemned Iran's actions, emphasizing that the strait has never been Iran's to close or restrict. This reflects a broader regional concern about the potential for Iran to leverage its control over the strait for economic and political gain.

As the situation unfolds, the enforcement of these tolls could set a dangerous precedent for other nations with strategic maritime chokepoints, potentially leading to further disruptions in global trade and energy markets.

• Shipping companies: Facing increased costs and potential rerouting due to tolls.
• Oil and gas markets: Experiencing volatility and price fluctuations as supply chains are disrupted.
• Regional economies: Particularly in the UAE, which relies on free passage for trade and logistics.
• Consumers: Likely to see increased prices for energy and goods as shipping costs rise.

• International legal actions: Watch for potential lawsuits or diplomatic efforts aimed at challenging Iran's tolls under UNCLOS. This could impact shipping routes and costs.
• U.S. military responses: Monitor any escalations in U.S. naval presence in the region, which could affect shipping security and insurance rates.
• Global oil prices: Keep an eye on fluctuations in oil prices as the situation develops, as reduced supply through the strait could lead to higher costs for consumers.