Iran's proposed toll system for passage through the Strait of Hormuz, charging up to $2 million per vessel, mirrors historical practices of taxing waterways, such as the Ottoman Empire's fees for transit through the Dardanelles. In the late 18th century, a merchant paid 300 akçe, equivalent to about $15,000 today, to the Ottomans for safe passage of a modest cargo through the Dardanelles, which they considered their private inland lake, the Black Sea.
However, this move by Iran is facing significant international opposition. The United Nations Convention on the Law of the Sea (UNCLOS) allows for transit passage through international straits without interference from coastal states, permitting only limited service charges like pilotage and towing. Major global shipping firms are refusing to pay these new tolls, and the Institute for the Study of War (ISW) has labeled them a "maritime protection racket." The United States, China, and Gulf countries have all rejected Iran's levy, with the US urging shipping companies not to comply and warning of potential secondary US sanctions.
While canals like Suez and Panama are permitted to charge transit fees due to their man-made nature and costly maintenance requirements, the Strait of Hormuz is a natural strait governed by different international maritime laws. For example, the 1888 Constantinople Convention explicitly allows Egypt to levy tolls for the Suez Canal, generating around $4 billion annually. Similarly, the Panama Canal Authority charges fees under separate treaties. In contrast, the 1936 Montreux Convention for the Turkish Straits (Bosporus and Dardanelles) only allows for limited service fees.
Iran has justified its fees as war reparations, payment for navigational services, environmental protection, and enhanced security, and is reportedly drafting a joint protocol with Oman. However, the international community, including the US, insists the Strait must remain international waters, open to all nations without Iranian control or special permission. This dispute remains a major obstacle in ongoing peace talks between the US and Iran aimed at reopening Hormuz.
