Reflections on Hormuz Route Fees

There’s been a bit of a stir regarding the possibility that the U.S. might consent to a toll system managed by Iran in the Strait of Hormuz. People are reacting—some don’t seem to be taking it well. It sounds alarmist, with fears that accepting such a toll would make America complicit in piracy, not to mention contrary to everything it stands for. It’s that familiar tone of panic suggesting that a careless Trump is about to destabilize the world again.

But honestly, that’s a misinterpretation of history. The United States wasn’t built on the idea that all strategic waterways must remain free forever. Instead, American diplomacy has historically focused on defending commercial interests and freedoms. European powers attempted to police the world, usually for their own economic conveniences. And it’s worth noting that in our early years, Washington often negotiated and navigated toll points rather than blindly enforcing free passage.

Legalities of Charging Fees in Hormuz

First off, some argue that charging in “international waters” is illegal. The reality is that the shipping route through Hormuz primarily runs through Omani and some Iranian territorial waters—not the open ocean. According to traditional maritime law, while tolls for crossing international straits are prohibited, fees for specific services, like anti-piracy security or traffic management, can be legitimate.

Take Turkey as an example. Under the 1936 Treaty of Montreux, commercial vessels enjoy freedom of navigation through the Bosphorus and Dardanelles, yet Turkey regularly collects tonnage-based fees for ships that pass through without stopping at a port. These charges are for essential services recognized by the Convention, like lighthouses and traffic controls. Free navigation and service fees have coexisted for quite some time.

Some naysayers might claim that fees at Hormuz violate the 1982 United Nations Convention on the Law of the Sea, but it’s important to note that neither the U.S. nor Iran ratified that treaty. Iran notably rejected key clauses, such as the outright ban on transit fees.

Misunderstanding the Suez Analogy

The most compelling historical counterpoint comes from the State Department’s own archives. In a 1956 memorandum concerning the Suez Canal, it stated that “free and open” doesn’t equate to “free.” It acknowledged fees for construction, maintenance, management, and other operational needs. Freedom of navigation refers to non-discriminatory practices, not an outright prohibition on fees for particular services.

Commentators currently liken the situation with Iran to a “Suez Moment” for America, suggesting it reflects the decline of Britain and imperial humiliation. This analogy is flawed. Back in 1956, the U.S. sided with Britain and France in a conflict with Egypt over canal nationalization, later promoting a UN ceasefire. The real analogy isn’t the U.S. as Britain; rather, it’s more aligned with Trump as Eisenhower—declining military force in the face of shifting regional power dynamics.

The Suez crisis also showed us that disaster narratives can be misleading. Post-crisis, Egypt affirmed “free and uninterrupted navigation” while continuing to collect controlled fees. The canal was reopened in April 1957, demonstrating that state control and tolls didn’t spell the end for global trade; they merely adapted.

Historic Maritime Policy of the U.S.

The U.S. has a longstanding tradition of navigating chokepoints in pursuit of national interests, not as an ideological commitment to ensuring each nation’s trade routes remain open. Historical accounts show that the U.S. didn’t enforce tolls on the Dutch East India Company or Spanish outposts. After its independence, the young U.S. lacked the naval power to confront threats directly, leading it to negotiate tribute with Barbary states, eventually going to war only when those states began seizing American vessels.

In the early 19th century, when Britain launched a punitive campaign against the Qawasim confederacy—who charged tolls—the U.S. remained uninvolved. American commercial interests in the Gulf were minimal, and it prioritized protecting its Atlantic and Mediterranean commerce instead. This hands-off policy was characteristic of U.S. diplomacy pre-Cold War, intervening mostly when direct interests were threatened.

Now, will European nations object to changes in Hormuz? That’s entirely possible. While fighting Iran, sending our navy there might encourage a shift in their plans concerning the Straits.

Reframing the Conversation

When thinking about potential tolls at Hormuz, it’s more apt to refer to them as “Hormuz Security and Navigation Service Fees.” These would be upfront, associated with actual services like traffic management and emergency response. It follows practices seen in Montreux and Suez.

The argument that fees should only apply to man-made canals like Suez and Panama, rather than natural straits, doesn’t really hold water in principle. These canals are crucial to world trade, and any tolls would be for recovering costs that have long been covered. Moreover, neither canal is currently governed by the countries that built them, but rather by those whose territories they traverse. So, lacking a solid rationale, this view simply seems to boil down to “I pay, so you shouldn’t have to.”

The real choice we face isn’t about upholding maritime ideals versus moral concerns. It’s between a managed, paid transportation system and the much higher costs posed by potential blockades, war, and soaring insurance premiums. For decades, the U.S. has insisted on unrestricted passage at times even through military might. That may have been justified when addressing the global threat of communism, reliant on oil moving through the Strait, but times have changed. Our approach to secure navigation needs to evolve as America reshapes its strategies for the contemporary world.

The tradition of negotiating with Barbary States resonates with how Eisenhower distanced himself from allies during the Suez crisis. America’s role isn’t to enforce conditions set by colonial powers but to prioritize its own interests. Should President Trump move forward with the idea of tolls at Hormuz, it might reflect a commendable step back to the foundational principles of our foreign policy.