Iran pushes $40b Hormuz toll plan as ship attack halts evacuations

Iran is lobbying Middle East and Asian nations to support a plan generating $40 billion annually in Strait of Hormuz transit fees, a proposal US Secretary of State Marco Rubio rejected as "never" acceptable under any agreement.

"Nobody in the world has the right to charge for the use of an international waterway, and that will never be an acceptable condition of any agreement," Rubio told reporters Thursday in Bahrain after meetings with Gulf Cooperation Council counterparts.

The push for fees comes as a cargo ship was struck by an unidentified projectile in the Gulf of Oman on Thursday, prompting the International Maritime Organization to suspend evacuation operations for about 11,000 seafarers stranded in the waterway. At least three commercial vessels, including two supertankers, turned back after Iran's Islamic Revolutionary Guard Corps issued radio warnings, ship-tracking data show. Brent crude reversed earlier losses to trade near $75 a barrel, up 1.6%, while West Texas Intermediate rose about 2%.

The Strait of Hormuz handles about 21% of global oil supply, and any sustained disruption — whether through tolls, blockades or military incidents — threatens to push crude above $80 a barrel, reignite inflation concerns and pressure equity markets already pricing in geopolitical uncertainty.

Iran's proposal, reported by the Wall Street Journal, envisions a joint fee structure with Persian Gulf littoral states modeled on Turkey's Dardanelles Strait toll system. Under the 1936 Montreux Convention, Turkey levies a "gold franc" transit tax — set at $6.70 per ton from July 1 — covering health, lighthouse and life-saving services. Iran is also studying the multilateral security patrol model used in the Malacca Strait, where Malaysia, Indonesia and Singapore share costs with funding from Japan's Nippon Foundation.

The legal hurdles are substantial. Iran has signed multiple international and regional agreements prohibiting unilateral fees on international waterways, said James Kraska, professor of maritime law at the US Naval War College. Any service charge would require consensus from the IMO's 176 member states, according to people familiar with the matter.

Rubio's Gulf tour — his first to the region as secretary of state and his first since the US-Iran interim ceasefire — aimed to reassure allies unsettled by the emerging deal. Saudi Arabia, the United Arab Emirates and Qatar have all privately opposed Iran's fee proposal, according to diplomats. Oman, which co-signed a joint statement with Iran on Tuesday to study future administration of the strait, publicly disavowed any support for tolls during the GCC meeting, Rubio said.

The ship attack Thursday highlighted the fragility of the security environment. The UK Maritime Trade Operations office advised vessels to "transit with caution" after the unidentified projectile struck a cargo vessel's bridge southeast of Oman, causing structural damage but no casualties. The IMO had declared the strait safe for transit just two days earlier, before abruptly canceling a scheduled press briefing on Thursday citing "urgent matters."

Shipping costs are already reflecting the renewed risk. Daily hire rates for very large crude carriers hauling Gulf cargoes have surged to nearly $470,000, shipbroker Clarksons said, as owners position for a wave of Middle Eastern exports. Insurance premiums, which had fallen close to pre-conflict levels after the ceasefire, are expected to rise again.

The last time the strait faced a comparable disruption — during the 2023 Iran-US naval standoff — oil prices rose 12% over six weeks and shipping insurance costs tripled, according to data from the International Group of P&I Clubs. A repeat of that scenario would add about $8 to $10 to the cost of a barrel of Brent crude.

This article is for informational purposes only and does not constitute investment advice.