Iran Imposes Transit Fees on Strait of Hormuz Shipping Payable in Yuan and Crypto
The operator of an oil tanker stranded in the Persian Gulf recently received an enticing offer. As missiles and drones streaked overhead, the vessel—which had been at anchor for weeks—was promised a safe escort through the Strait of Hormuz by the Iranian Navy.
However, according to a company executive, there was a condition: the ship had to fly the Pakistani flag. The company ultimately declined the proposal. While Iran had agreed to allow 20 Pakistani vessels to transit the strait, Islamabad possessed very few ships flying its national colors in the Gulf. Sources familiar with the matter said Islamabad subsequently approached some of the world’s largest commodity traders to see if they had vessels that could temporarily re-register under the Pakistani flag.
IRGC Exerts Control over Maritime Traffic
The arrangement underscores the significant control the Islamic Revolutionary Guard Corps (IRGC) exerts over maritime traffic in the Strait of Hormuz, a chokepoint for 20% of the world’s petroleum and liquefied natural gas. Shipping industry insiders and government officials with direct knowledge of the negotiations said the IRGC is now charging transit fees, granting preferential treatment to ships from nations it deems friendly while threatening those from perceived “hostile” states.
New System Implemented for Transit Fees
Under the new system, ship operators must contact an intermediary linked to the IRGC. They are required to provide comprehensive data, including ownership, flag, cargo manifest, destination, crew list, and Automatic Identification System (AIS) transponder data. The intermediary forwards this file to the IRGC Navy’s Hormuzgan Provincial Command for a background check. This process ensures the vessel has no ties to Israel, the US, or other states Iran considers adversaries.
Fees Payable in Yuan or Stablecoins
If a ship meets these criteria, negotiations over the “toll” begin. Sources indicated that Iran uses a five-tier ranking system for nations; vessels from “friendly” countries are more likely to secure favorable terms. For oil tankers, the starting price is typically around $1 per barrel, payable in yuan or stablecoins. For a Very Large Crude Carrier (VLCC) with a 2-million-barrel capacity, this represents a significant outlay.
Legal Experts Dispute Iran’s Interpretation
The legal basis for Iran’s fee implementation remains unclear. Under international law, nations have sovereign rights over territorial waters extending 12 nautical miles from their coast, but the right of “transit passage” through international straits is generally protected. In a recent letter to the International Maritime Organization (IMO), Iran stated that non-hostile vessels could safely navigate the strait, though it confirmed restrictions on hostile ships.
Legal experts dispute this interpretation. Jason Chuah, professor of maritime law at the University of Hong Kong, noted that “Iran’s actions are inconsistent with international law and may be considered a violation of the right of transit passage.”
Original Article: Iran imposes ‘transit fees’ on Strait of Hormuz shipping payable in yuan and crypto — Com