Iran Formalizes Control Over Hormuz with ‘Toll Booth’ System
Iran seems to be positioning itself as the gatekeeper for the Strait of Hormuz, the most crucial artery for oil shipments globally. The action may solidify Tehran’s effective control over the vital waterway and formalize its capacity to maintain its oil exports to China. Communications from Iran to the United Nations maritime authority, along with the experiences of vessels navigating the Strait, indicate the potential establishment of a system resembling a “toll booth.” Vessels are required to navigate into Iranian waters and undergo scrutiny by Iran’s Islamic Revolutionary Guards Corps. At least two vessels have compensated for their passage. Traffic through the Strait has decreased by 90 per cent since the onset of the Iran war, causing global oil prices to soar and leading to concerning shortages in Asian nations that rely on oil from Persian Gulf countries via the Strait. Since March 1, only approximately 150 vessels, comprising tankers and container ships, have made the transit, as reported. That represents slightly more than a day’s typical traffic prior to the conflict. According to data, Iran’s Kharg Island terminal loaded 1.6 million barrels in March, a figure that remains largely unchanged from prewar monthly loading totals. The majority of clients consist of small, private refineries in China that show little concern for U.S. sanctions.
A significant portion of the vessels that successfully navigated in recent weeks moved eastward, exiting the Gulf; ships affiliated with Iran represented 24 percent of transits, those from Greece accounted for 18 percent, and China made up 10 percent, based on ownership or flag registration. Upon further scrutiny, it becomes evident that vessels linked to Iran represented 60 percent of transits in the initial phase of the war, and in recent days, this figure surged to approximately 90 percent. Approximately fifty percent of the vessels disable their radio identification systems, which indicate their location, prior to passage and subsequently reemerge on the opposite side in the Gulf of Oman. There exists a rationale behind their hesitance and careful approach. According to the U.N.’s International Maritime Organization, which monitors maritime security, at least 18 ships have been hit and at least seven crew members have been killed. It did not specify which nation was responsible for the attack on the vessels. “Iran’s IRGC has imposed a de facto toll booth’ regime in the Strait of Hormuz,” states shipping information firm Lloyd’s List Intelligence. Typically, vessels navigate through a two-lane shipping channel located in the center of the strait. However, more and more vessels are opting for an alternative path, navigating to the north around Larak Island, which positions them within Iran’s territorial waters and nearer to the Iranian coastline.
Entities seeking safe passage for their vessels must provide their information to what Lloyd’s List Intelligence designates as “approved intermediaries” of the Revolutionary Guard. This includes details about the cargo, owners, destination, and a comprehensive crew list. Approved vessels are assigned a code and are accompanied by an IRGC vessel. Oil takes precedence, and vessels undergo “geopolitical vetting,” according to Lloyd’s. According to Lloyd’s List, “While not all ships are paying a direct toll, at least two vessels have and the payment is settled in yuan,” referring to the Chinese currency. It seems that certain ships have been permitted passage as a result of diplomatic pressure. According to Lloyd’s, two Indian vessels loaded with liquid petroleum gas have successfully passed. On Tuesday, the IMO received a letter from the Iranian government stating it “had implemented a set of precautionary measures aimed at preserving maritime safety and security.” The letter asserted that Iran was operating in accordance with the principles of international law. It is reported that Iran’s parliament seems to be drafting a bill aimed at formalizing fees for certain vessels navigating the Strait of Hormuz. The Fars and Tasnim news agencies, which have ties to Iran’s Revolutionary Guard, reported that lawmaker Mohammadreza Rezaei Kouchi stated, “parliament is pursuing a plan to formally codify Iran’s sovereignty, control and oversight over the Strait of Hormuz, while also creating a source of revenue through the collection of fees.” The IMO has condemned the attacks on vessels and has called for an internationally coordinated approach to secure passage through the Strait that respects freedom of navigation.
The statement from Sultan al-Jaber indicated the increasingly firm stance of the United Arab Emirates as the conflict approaches its one-month milestone. “Weaponizing the Strait of Hormuz is not an act of aggression against one nation,” al-Jaber said in a speech for an event hosted by the Middle East Institute in Washington. It constitutes economic terrorism directed at every consumer and every family reliant on affordable energy and food. “When Iran holds Hormuz hostage, every nation pays the ransom, at the gas pump, at the grocery store and at the pharmacy,” he said. “No country can be permitted to disrupt the global economy in this manner.” Article 19 of the UN’s Law of the Sea Treaty stipulates that nations are required to permit “innocent passage” of peaceful, law-abiding vessels within their territorial waters. There is no provision in international law anywhere to establish a toll booth and extort shipping. “This is Iran using the element that they have right now, which is control of the Strait of Hormuz,” said Sal Mercogliano. Jasem Mohamed al-Budaiwi, stated that Iran’s collection of fees for passage is “an aggression and a violation of the United Nations agreement on the law of the sea.” Such payments are likely to violate American and European sanctions imposed on the Guard, a significant power center in Iran that oversees its ballistic missile arsenal and played a crucial role in quelling nationwide protests in January.
