UNTIL Donald Trump’s latest pronouncement on tolls for the Strait of Hormuz is backed by detail, it remains impossible to separate rhetoric from reality.

This is not the first time the US president has floated an outlandish idea only for it to quietly fade away. Trump has previously suggested the US could charge for protecting traffic through Hormuz — even hinting that proceeds could be shared with Iran — before retreating from the proposal.

Yet his latest Truth Social declaration that the US, AKA “THE GUARDIAN OF THE HORMUZ STRAIT”, could impose a charge equivalent to 20% of cargo value was enough to send shipping industry chat groups into expletive-laden overdrive.

Taken literally, such a levy would amount to roughly $17m for a fully laden large gas carrier. At those levels, the Iranian Revolutionary Guard Corps’ own pricing structure begins to look remarkably restrained.

Even at the height of Tehran’s initial “toll booth” experiment, when reports suggested one of the first laden VLCCs paid around $2m to leave the Middle East Gulf, the sums now being discussed make those charges appear almost modest. In practice, Iranian tolling quickly evolved into “service fees” typically quoted at $120,000-$250,000, with many payments ultimately obscured within opaque government-to-government arrangements where commercial logic gives way to political bargaining.

But the price is not the real issue.

Whether the going rate is $200 or $20m, there is no legal basis for charging vessels to exercise their right of transit passage through an international strait. Whether such demands originate in Tehran or Washington is largely beside the point. The danger lies in normalising the idea that access to one of the world’s most important maritime arteries can be subject to politically conditioned payments.

The shipping industry should be watching closely for any future “deal” over Hormuz that effectively puts a price tag on freedom of navigation.

Iran entered its recent confrontation with the assumption that its nuclear programme was its greatest source of leverage. Events quickly reinforced a longstanding reality: the strait itself remains Tehran’s most powerful strategic trump card.

A US counter-toll would be no less problematic. As International Maritime Organization secretary-general Arsenio Dominguez has warned, imposing charges on strait transit would set a dangerous precedent. The UN Convention on the Law of the Sea is clear. International straits are not toll roads.

The traffic separation scheme in Hormuz, jointly proposed by Iran and Oman and adopted by the IMO in 1971, has governed navigation safely for decades. Yet in an era when established norms and elements of the rules-based order increasingly appear negotiable, the lack of legal precedent can no longer be assumed to be an effective safeguard.

That should concern far more than the shipping industry. What is at stake is not merely the cost of transiting Hormuz, but the principle that global trade routes cannot be auctioned to the highest geopolitical bidder.

Richard Meade
Editor-in-chief, Lloyd’s List

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