Iran asked ships to pay for passage through Hormuz. Now the US is proposing its own charge for providing security. The bigger concern is not the price, but the precedent: once free transit through an international strait becomes negotiable, the principle itself starts to weaken.
Two numbers, worth putting side by side
Iran, through its Persian Gulf Strait Authority, has reportedly charged up to $2 million per transit of the Strait of Hormuz.
Today the US President announced that America will act as "guardian" of the strait, reimbursed at 20% on all cargo shipped. A VLCC carries around two million barrels. At today's prices, that is roughly $30 million of cargo value per transit. Around fifteen times what Iran was asking.
The IMO has already stated the obvious, there is no legal basis for mandatory tolls simply to transit a strait used for international navigation, and passage should remain free of tolls and charges.
But the more troubling development is the response from Tehran. Iran's foreign minister did not dispute the principle and he said whoever provides safe passage should be compensated, that 20% was too much, and that Iran "will be fair."
So the argument is no longer about whether an international strait can be taxed, but about who collects, and at what rate.
And this is the part that matters most, because whether or not either fee is ever implemented, the statements themselves are dangerous. A norm does not need to be enforced to be broken. It only needs to be treated as negotiable. Within hours of the announcement, the two sides were haggling over a percentage rather than defending a principle. No money has changed hands, and the damage is already done.
The Strait of Hormuz lies within the jurisdiction of coastal states, but the right of international transit through it is not theirs to sell. It is guaranteed by the law of the sea. The same is true of Malacca, Gibraltar and the Danish Straits.
Transit passage is not a favour granted by whoever holds the guns nearest the water. It is the legal foundation seaborne trade is built on, and once it is priced anywhere, it can be priced everywhere.
The European Union, the IMO and the shipping and trading community should be saying so clearly, and in one voice.
VLCC volumes fell as Hormuz disrupted traditional Gulf flows, but longer Atlantic-to-Asia voyages absorbed more vessel time. That has supported freight despite fewer barrels moving — but the effect could unwind quickly if trade routes normalise.
Oil prices are falling as the market prices a reopening of Hormuz, but tanker rates and insurance are telling a less comfortable story. Cargo is starting to move again, yet ships remain scarce and the physical system is still far from normal.
The closure of Hormuz delivered a major shock to tanker markets, but trade adapted through rerouting, longer voyages and greater vessel-day absorption.
Originally published on LinkedIn, 1 May 2026