Iran's top security organ has initiated a new body to manage the Strait of Hormuz and announced plans to offer insurance for vessels transiting the strait and surrounding Gulf waters. This proposal, detailed by Iran's semi-official Fars news agency, suggests that payments for these insurance policies would be settled in cryptocurrencies such as Bitcoin, with the "Hormuz Safe website" already offering maritime cargo insurance.
The Iranian Economy Ministry has outlined this framework, viewing marine insurance as a method to establish permanent economic and administrative control over the Strait, and estimates that the initial phase of this plan could generate more than $10 billion in annual revenue. This initiative also aims to provide Iran with "informational dominance" and the ability to differentiate ships by nationality, covering aspects like inspection, detention, and confiscation, while notably excluding losses from weapon strikes.
Despite the proposed benefits for Iran, the acceptance of this insurance plan by most maritime powers and shipping firms is anticipated to be limited. Experts like Khalique suggest that only countries already wary of Western sanctions, such as China, or smaller trading states that prioritize cost reduction or guaranteed passage, might consider the Iranian insurance. The U.S. has implemented a naval blockade on Iranian ports since April 13, raising questions about how it would treat vessels that pay Iran for transit insurance.
The announcement comes amidst an ongoing conflict and after Iranian officials had previously suggested imposing transit charges or security fees. While Iran's Foreign Ministry spokesman, Esmail Baghaei, stated that they are not imposing passage tolls but rather "fees for services provided," including navigation services, environmental protection, and ship insurance, this approach is expected to face opposition from the U.S. and the international community. International maritime law generally does not support coastal states charging tolls for natural waterways like straits, and it remains uncertain whether the U.S. will recognize Iran's right to collect such fees, despite Iranian claims of a memorandum of understanding with the U.S.
