Iran's Hormuz Toll Plan: A Seismic Shift in Global Maritime Order

Source: The Hindu| Date: March 31, 2026

Background: From Threat to Formalization

To understand the full weight of Iran's parliamentary move, one must situate it within the broader catastrophe unfolding in West Asia. On February 28, 2026, the United States and Israel initiated coordinated airstrikes on Iran under Operation Epic Fury, targeting military facilities, nuclear sites, and leadership, resulting in the death of Supreme Leader Ali Khamenei.

Iran responded with missile barrages on Israeli cities and US bases in the Gulf, including in the UAE, Qatar, and Bahrain. The Strait of Hormuz — long used as a rhetorical bargaining chip — was then weaponized in earnest.

Iranian state media confirmed Monday that a parliamentary commission had approved plans to impose tolls on vessels transiting the Strait of Hormuz, a waterway vital to oil and gas shipments that has been effectively closed due to the Middle East war.

This is not merely a legislative act; it is Iran's most explicit assertion yet that it intends to redefine the legal and economic order of the world's most critical maritime chokepoint.

What the Plan Actually Contains

The approved plan outlines several key components, including enhanced security arrangements for the Strait, ship safety protocols, environmental protection measures, and the implementation of a rial-based toll system. It explicitly bans American and Israeli vessels from passing through the Strait, reinforces Iran's sovereign control over the region, and highlights cooperation with Oman in establishing a legal framework for the waterway. Additionally, the plan prohibits vessels from countries that participate in unilateral sanctions against Iran from transiting the Strait.

Crucially, the proposal is yet to become law — it must still pass a full vote in Iran's parliament before undergoing review by the Guardian Council, a constitutional body responsible for ensuring legislation complies with Islamic law and the constitution. Final approval would require the signature of the president. But the committee approval signals unmistakable political direction.

Already in Practice Before the Law

The legislation is, in many ways, catching up to reality. While the Iranian parliament is yet to pass the legislation to impose tolls, in the past two weeks, 26 vessel transits through the strait have followed a route pre-approved under the IRGC's "toll booth" system that requires the ship operators to submit to a vetting scheme, according to Lloyd's List.

The Gulf Cooperation Council's secretary-general, Jasem Mohamed al-Budaiwi, accused Iran of charging for safe passage through the strait; the first top official to do so. Industry experts say some ships are paying in Chinese yuan to pass through the strait. Iranian lawmaker Alaeddin Boroujerdi has reportedly confirmed fees of $2 million per vessel are being charged to some ships.

The Economic Calculus: Billions at Stake

Iran's motivation is not merely punitive; it is potentially enormously lucrative. Normally, around 20 million barrels of crude oil and oil products pass through the Strait of Hormuz each day, roughly equivalent to about 10 very large crude carriers. At a reported fee of $2 million per tanker, that would translate to around $20 million a day, or about $600 million a month, from oil alone.

If LNG shipments are included, that figure could rise to more than $800 million a month; equivalent to about 15–20% of Iran's monthly oil export revenue in 2024. For comparison, Egypt earns between $700 and $800 million a month from the Suez Canal.

Iranian officials have framed it explicitly as an opportunity. Mohammad Mokhber said one of the most important opportunities created by the war was the possibility of reshaping Iran's role in the Strait of Hormuz: "After the imposed war, by defining a new regime for the Strait of Hormuz, Iran will move from being under sanctions to a powerful position in the region and the world."

The Global Energy Crisis: Scale and Severity

The toll plan comes against the backdrop of an energy disruption of historic proportions. Traffic through the strait has fallen by 90% since the start of the Iran war, sending global oil prices skyrocketing and inflicting alarming shortages on Asian nations that get their oil from Persian Gulf countries via the strait. Lloyd's List Intelligence estimates only 105 ships have passed through the strait between February 28 and March 18, compared with 1,900 in the same period of 2025.

International Energy Agency chief Fatih Birol has warned that the current 11-million-barrel-per-day deficit is worse than both of the 1970s oil shocks combined.

US government officials and Wall Street analysts are starting to consider the prospect that oil prices might surge to an unprecedented $200 a barrel, while the situation in liquefied natural gas is even more extreme — the Strait of Hormuz typically accounts for about a fifth of global LNG supply, and unlike oil, there are no alternative routes to get the gas to market.

The Legal Minefield: International Law vs. Iranian Sovereignty

Iran's toll plan has no foundation in international maritime law, according to leading legal experts. James Kraska, a professor of international maritime law at the US Naval War College, stated that imposing transit fees is a violation of the rules of transit passage, and that there is no legal basis under international law for a coastal state to charge fees in an international strait like Hormuz.

"The Strait of Hormuz is a strait used for international navigation, with overlapping territorial seas of Iran and Oman… because it is an international strait, the right of transit passage applies for all states, which permits unimpeded surface, overflight, and submerged transit," he said.

Iran's counter-argument rests on reframing the strait as a security asset it provides. Lawmaker Somayeh Rafiei framed the toll system as compensation for providing security: "In the event that the Strait of Hormuz is used as a secure route for ship traffic, energy transit and food supply, countries will be required to pay tolls and taxes to the Islamic Republic of Iran."

This framing mirrors port dues and canal tariffs; but the legal analogy fails because the Suez and Panama Canals are artificial waterways built and owned by their respective states, while the Strait of Hormuz is a natural international waterway governed by UNCLOS.

Geopolitical Escalation: New War Conditions

Iran has now added sovereignty over the Strait of Hormuz to its list of demands for ending the war. In previous rounds of talks with the US, Iran pushed for sanctions relief and recognition of its right to peaceful nuclear technology, but not control over the Strait of Hormuz; Iran is now signaling that this leverage could be formalized.

Mojtaba Khamenei used his first purported address as Iran's new supreme leader to say that the leverage of blocking the waterway "must continue to be used." Meanwhile, the international community is resisting: G7 foreign ministers stressed the absolute necessity to restore safe and toll-free freedom of navigation.

The US is equally firm. US Treasury Secretary Scott Bessent stated that the United States plans to retake control of the Strait of Hormuz, while President Trump threatened to target Iran's civilian energy infrastructure, including power plants, oil wells, and Kharg Island, if Tehran does not reopen the Strait.

The Oman Factor: A Quiet But Critical Variable

One underreported dimension of the toll plan is its reference to Oman. The plan details cooperation with Oman to establish a legal framework for the strait's management. Oman shares control of the strait's southern side, making it indispensable to any workable toll regime. Muscat has historically maintained neutrality and back-channel communication with Tehran, making it a potential — though reluctant — partner in legitimizing Iran's claims. Whether Oman participates, resists, or simply remains silent will significantly shape the plan's viability.

What Happens Next: Three Scenarios

Scenario 1 — Diplomatic Resolution Before Full Passage: If a ceasefire is reached before the bill clears Iran's full parliament and Guardian Council, the toll plan may be shelved as a negotiating concession. This remains the most optimistic scenario for global energy markets.

Scenario 2 — De Facto Tolling Continues Without Legal Formalization: The IRGC may continue its informal toll booth system regardless of the bill's legislative fate. This effectively achieves Iran's economic objectives without triggering a formal international legal confrontation, giving Tehran plausible deniability.

Scenario 3 — Full Legal Enactment and Confrontation: If the bill passes into law, it would set up a direct confrontation with US naval forces operating in the region, international maritime law, and the global shipping community. This is the most destabilizing scenario and would likely trigger unprecedented responses from the US, EU, and Asian powers.

Conclusion: A Redrawing of Rules

Iran's Strait of Hormuz Management Plan represents one of the most audacious assertions of unilateral maritime sovereignty in the post-WWII international order. It seeks to convert a geographic chokepoint into a permanent instrument of Iranian statecraft; a toll-collecting, politically selective passageway that rewards friends and punishes adversaries. Whether it succeeds legally, economically, or diplomatically, the very act of its approval signals that Iran has no intention of returning to the pre-war status quo. The world is watching a nation attempt to rewrite the rules of the sea; and the global economy is paying the price while it does.