THE latest US sanctions targeting what Washington describes as an IRGC-backed maritime insurance extortion scheme underline a point often missed in discussions about the Strait of Hormuz: this is no longer primarily a dispute over fees.

Iran’s battle over the future governance of Hormuz is about shaping the post-war order. For shipping markets, the central question is not when the waterway reopens, but who controls the rules, risks and revenues that govern passage.

The US Treasury’s latest measures target two entities accused of forcing vessels to purchase mandatory transit insurance through Iranian-approved channels. Washington sees the scheme as a desperate effort to monetise regional instability and generate revenue for the Revolutionary Guards.

Tehran sees something very different.

From the Iranian perspective, Hormuz has become part of the country’s national security architecture. Officials increasingly frame wartime navigation controls not as a temporary emergency measure but as a foundation for a future governance regime. The distinction matters because it explains why successive diplomatic efforts have struggled to gain traction.

The latest example is an Omani-backed proposal for shared management of the strait. Iran has rejected the concept outright, insisting it will not recognise the southern shipping corridor established by Oman and the US, and arguing that outbound and inbound navigation routes cannot be separated from Iranian control.

This is where the debate moves beyond transit fees.

Iran has no broadly recognised legal authority to levy tolls on international navigation. Its leverage instead rests on deterrence and the perception that coordination with Tehran reduces operational risk. In practice, shipping markets care less about legal theory than certainty. Owners will tolerate unconventional arrangements if costs are predictable, administration is straightforward and voyages proceed without delay.

The real challenge is sustainability.

Iran can maintain influence for as long as the industry believes passage is safer with Iranian coordination than without it. But that confidence can erode surprisingly quickly. Every vessel that transits outside Tehran’s preferred framework without incident weakens the argument that Iranian involvement is indispensable. Conversely, even a handful of successful interdictions or attacks could reinforce that perception and extend Iran’s leverage.

Sanctions present a second constraint. While some non-Western operators and shadow fleet participants may continue paying for Iranian-approved transit services, mainstream shipowners reliant on Western insurers, banks and compliance systems face a different calculation. For them, the issue is no longer the level of any transit charge but whether payment creates sanctions exposure.

That is why the ultimate arbiter of Hormuz’s future may not be diplomats in Muscat or politicians in Washington and Tehran. It may be the insurance market. Governments can negotiate ceasefires and governance frameworks. Insurers determine when risk has genuinely receded.

The future of Hormuz therefore hinges less on who controls the waterway than on who controls confidence in its safe use. Iran may possess geography and leverage. Whether it can convert either into a durable peacetime order remains the unanswered question.

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

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