Iran formalizes its chokehold over the Strait of Hormuz

Iran Establishes Control Over Strait of Hormuz, Creating De Facto Shipping Toll System

Iran appears to be asserting unprecedented control over the Strait of Hormuz, effectively setting up a checkpoint system that gives Tehran a chokehold over the world’s most critical oil shipping route. Evidence suggests Iranian authorities are vetting vessels and, in some cases, collecting payments for safe passage through the strategic waterway.

Maritime intelligence indicates that the Islamic Revolutionary Guards Corps (IRGC) has established what shipping information firm Lloyd’s List Intelligence describes as a “de facto toll booth regime” in the strait. Ships seeking passage must submit detailed information to IRGC intermediaries, including cargo manifests, ownership details, destinations, and complete crew lists before receiving approval codes and military escorts.

“While not all ships are paying a direct toll, at least two vessels have and the payment is settled in yuan,” Lloyd’s List reported, referring to the Chinese currency. This arrangement appears to be evolving from an ad hoc system into a permanent one, with Iranian parliament reportedly working on legislation to formalize fees for some vessels transiting the strait.

The impact on global shipping has been dramatic. Traffic through the Strait of Hormuz has plummeted by approximately 90% since the outbreak of regional hostilities, according to maritime tracking data. Only about 150 vessels, including tankers and container ships, have transited since March 1, according to Lloyd’s List Intelligence – roughly equivalent to a single day’s normal traffic before the conflict.

This shipping disruption has sent global oil prices soaring and created concerning shortages in Asian nations that rely heavily on Persian Gulf oil exports. The strait is a crucial chokepoint through which approximately 20% of global oil supplies typically pass.

Interestingly, Iran’s own oil exports appear largely unaffected. The country’s Kharg Island terminal loaded 1.6 million barrels in March, virtually unchanged from pre-conflict monthly loading totals, according to data from analytics firm Kpler. These exports primarily serve small, private refineries in China that operate outside the scope of U.S. sanctions.

A closer examination of recent shipping patterns reveals Iran’s tightening grip on the waterway. While vessels connected to Iran accounted for about 60% of transits during the early phase of regional hostilities, that figure has recently surged to approximately 90%.

Ships are increasingly avoiding the traditional two-lane shipping channel in the middle of the strait, instead taking a northern route around Larak Island that places them firmly within Iranian territorial waters and closer to the Iranian coastline. About half of these vessels disable their automatic identification systems before transiting, only reappearing on tracking systems once they reach the Gulf of Oman.

The dangers for shipping are real. At least 18 vessels have been attacked and no fewer than seven crew members killed in the strait, according to the UN’s International Maritime Organization (IMO), which monitors maritime security.

Iran formally notified the IMO on Tuesday that it “had implemented a set of precautionary measures aimed at preserving maritime safety and security,” claiming these actions comply with international law. However, maritime experts strongly dispute this interpretation.

“There’s no provision in international law anywhere to set up a toll booth and shake down shipping,” says Sal Mercogliano, a maritime historian at Campbell University in North Carolina. “This is Iran using the element that they have right now, which is control of the Strait of Hormuz.”

Article 19 of the UN’s Law of the Sea Treaty explicitly requires countries to allow “innocent passage” of peaceful, law-abiding vessels through their territorial waters. Jasem Mohamed al-Budaiwi, secretary general of the Gulf Cooperation Council, condemned Iran’s actions as “an aggression and a violation of the United Nations agreement on the law of the sea.”

The situation has prompted sharp criticism from regional energy leaders. Sultan al-Jaber, who heads the Abu Dhabi National Oil Company, described Iran’s tactics as “economic terrorism,” saying: “When Iran holds Hormuz hostage, every nation pays the ransom, at the gas pump, at the grocery store and at the pharmacy.”

The IMO has called for an internationally coordinated approach to secure passage through the strait that respects freedom of navigation principles, but a resolution to the crisis appears distant as regional tensions continue to escalate.