Iran's proposal to collect tolls in the Strait of Hormuz violates trade
norms
[April 09, 2026] By
DAVID McHUGH and JOHN LEICESTER
FRANKFURT, Germany (AP) — To end the war with the United States and
Israel, Iran is demanding the right to collect tolls in the Strait of
Hormuz as a precondition for reopening the waterway vital to world oil
supplies.
Yet collecting tolls in the strait would violate a basic and enduring
principle of international maritime trade: freedom of peaceful
navigation. It's an ancient idea that was codified by the United
Nations' Convention on the Law of the Sea, which took effect in 1994.
Opening the strait would save the global economy from supply constraints
that have pushed energy and fertilizer prices sharply higher since the
war began on Feb. 28. But agreeing to Iranian toll-collecting would
cement the Islamic Republic's control over the strait through which 20%
of the world's oil is shipped — and enrich the country against whom the
war was launched.
U.S. President Donald Trump has made reopening the strait a priority.
But the White House said Wednesday he is opposed to tolls, and analysts
say the Gulf's oil producers are, too.
Analysts say they have seen no change in traffic through the strait
since the ceasefire was announced, despite claims to the contrary from
the White House.
Here are things to know about Iran's proposal and the international law
with which it collides.
Iran had already begun charging vessels passing through the strait
After the U.S. and Israel launched the war, Iran immediately exercised
leverage by blocking the strait with attacks — and threats of attacks —
on ships, making passage too risky. The disruption caused immediate
shortages in some Asian countries highly dependent on the region's
energy, sent gasoline prices higher in the U.S. and Europe, and
threatened global economic growth.
Iran then began vetting vessels in a murky scheme dubbed the “tollbooth”
by shipping analysts.
The ships were told to divert from the middle of the strait in Iranian
and Omani territorial waters and instead detour around Iran's Larak
Island. After delivering detailed information on crew and cargo to
intermediaries of Iran's paramilitary Islamic Revolutionary Guards
Corps, some vessels were allowed to proceed — and at least two
reportedly paid the equivalent of $2 million in Chinese yuan.
The Law of the Sea Treaty guarantees passage to peaceful ships
Iran's 10-point proposal for ending the war includes a provision
allowing it and Oman to charge ships passing through the Strait of
Hormuz, according to a regional official who spoke on condition of
anonymity to discuss negotiations they were directly involved in. The
official said Iran would use the money it raised for reconstruction.
But the Law of the Sea Treaty's Article 17 guarantees a right of
“innocent passage” for ships that do not threaten the coastal states. So
allowing Iran and Oman to start charging for passage through the strait
would set a dangerous precedent, experts said.
Freedom of navigation in the world’s seas has been a fundamental right
for hundreds of years, founded on “the idea that the sea doesn’t belong
to anyone,” said Philippe Delebecque, a professor and maritime law
expert at Paris’ Sorbonne University.
“Freedom of navigation has always been recognized, including
specifically in straits," he said. The concern is if the Strait of
Hormuz could be closed, then why not the Strait of Gibraltar between the
Mediterranean and the Atlantic, or the Strait of Malacca off Indonesia?
He called that scenario "the end of an international society."
Neither Iran or the U.S. have ratified the Law of the Sea Treaty
While 172 countries have ratified the U.N. convention, Iran and the
United States are among those that have not.
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A cameraman films the Indian flagged LPG carrier Jag Vasant
transporting liquefied petroleum gas, at the Mumbai Port in Mumbai,
India, after it arrived clearing the Strait of Hormuz, Wednesday,
April 1, 2026.(AP Photo/Rafiq Maqbool)
 “Not having ratified the convention
doesn’t give (Iran) total freedom of action in the Strait of
Hormuz,” said Julien Raynaut, who heads the French Association of
Maritime Law, a trade group. “It remains subject to international
law and notably this customary right of passage.”
An Iranian tollbooth could lead China to conclude that it could
restrict movement in the Taiwan Strait, Raynaut said.
Oman and Iran may face diplomatic pushback to adhere to the
convention, said Constantinos Yiallourides, a senior research fellow
at the British Institute of International and Comparative Law.
Free passage “is in the interest of everyone,” he said. “We all want
to get the best products at the best prices.”
The global economy needs the Strait of Hormuz reopened
Some economists say that, from a strictly financial standpoint, the
world would barely notice the additional costs from any tolling in
the Strait of Hormuz.
For example, a $2 million toll on a large tanker carrying 2 million
barrels of oil amounts to $1-per-barrel increase on that ship's oil.
“The burden does not fall on global consumers, but overwhelmingly on
the Gulf states that supply the oil that transits the strait,” wrote
the Bruegel think tank in Brussels. It said the world economy would
instantly benefit from the reopening the strait — returning 20% of
the world's oil to the market and sending prices lower.
Plus, by lowering oil prices, it would eliminate a
multibillion-dollar geopolitical windfall for Russia, whose oil is
suddenly in greater demand despite sanctions.
The international price of oil has jumped from around $72 per barrel
before the war to as high as $118 on March 31. On Monday, Brent
crude, the international benchmark, traded at $94.55, down sharply
after news of the two-week ceasefire.
The Gulf's oil producers are leery of Iranian control of the
strait
Saudi Arabia, the biggest Gulf producer, welcomed the ceasefire deal
between the U.S. and Iran but called for keeping the Strait of
Hormuz open “without any restrictions.”
Gulf countries have had to shut down some 12 million barrels per day
in crude production because there's no viable way around the strait
for much of their oil. The two pipelines that bypass it aren't big
enough to make up for all of the lost oil, and building new
pipelines would take years.
Given the downsides of the tollbooth proposal, the Gulf states would
only agree to it if all other options looked much worse, Bruegel
said.
A major objection in the West is that the toll would likely benefit
the Islamic Revolutionary Guard Corps, which is responsible for
Iran's ballistic missile program, suppresses domestic political
opposition, and is listed as a terrorist organization by the U.S.
and the European Union.
___
Leicester reported from Paris. Michael Biesecker in Washington
contributed to this report.
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