The United States and Iran have struck a fragile ceasefire agreement as of Tuesday, just ahead of a deal involving President Donald Trump. There’s a looming threat over civilization’s stability, which might soon be tested.
Trump then noted that the U.S. “will help increase traffic in the Strait of Hormuz. There’s going to be a lot of positive action—lots of money to be made!” He suggested, “This could usher in a golden age for the Middle East!”
On Wednesday, when pressed about whether Iran would consider imposing tolls on all vessels navigating through the Strait of Hormuz, which connects the Persian Gulf to the Gulf of Oman and is crucial for global oil transit, Trump remarked that they were considering a joint venture approach to enhance security.
Hours before the news from Iran broke, Trump expressed his optimism, calling the situation “a beautiful thing.” He claimed that an oil tanker was targeted while trying to make its way through the strait, alleging that Israel fired upon Lebanon in breach of the ceasefire.
Trump has shown a willingness for collaboration with Iran, although he previously hinted that the U.S. might impose tolls unilaterally on ships traversing the strait.
“How about we charge a fee?” he questioned. “Why shouldn’t we? We’re winners.” He has also emphasized the desire for a free flow of oil and other commodities.
However, implementing tolls on ships traveling through international straits is a complicated matter. The United Nations Convention on the Law of the Sea affirms ships’ “right of passage,” a privilege recognized by the U.S. and many other countries. It underlines that states bordering the straits should not disrupt this passage and specifies that fees can’t be charged solely for transiting through territorial waters.
According to these international agreements, tolls can only be levied on man-made canals, raising questions about the feasibility of any proposed toll system.
As Saleem Ali, a geography professor, pointed out, “Unfortunately, all international law is somewhat weak,” highlighting the dependence on mutual respect between states.
Not everyone is on board with the toll idea. Karen Young from Columbia University termed it “crazy to think we’re collectively collecting fees for government benefits.” Similarly, former Israeli government spokesperson Eilon Levy warned that if Trump, by pushing for such tolls, inadvertently supports the Islamic Revolutionary Guard Corps, it could lead to a “humiliating disaster for the United States.”
Meanwhile, Iran appears to have its own strategy, suggesting that ships passing through the strait might be required to pay in cryptocurrency. A spokesperson for Iran’s Oil, Gas and Petrochemicals Export Union noted that during the ceasefire, ships would have to pay the equivalent of $1 per barrel of oil, and notify Iranian authorities of their shipments.
Once Iran assesses the request, ships would have a short timeframe to pay in Bitcoin, making tracking difficult due to sanctions. This could slow the process down, yet Iran seems unconcerned about rushing it.
Last week, estimates suggested if Iran charged $2 million per ship to cross the strait, this might yield around $110 billion annually, if traffic levels returned to pre-war norms.
According to a European think tank, this toll structure might raise global oil prices slightly, but costs would mainly fall on Gulf exporters.
Ultimately, for Iran to implement such tolls, it first needs to maintain open straits.
