No Tolls, Just Fees: Iran’s Hormuz Play

Iran will not charge transit tolls for ships passing through the Strait of Hormuz, but it will charge fees, and the distinction matters enormously for global energy markets.

Foreign ministry spokesperson Esmail Baghaei confirmed Monday that under the newly finalized memorandum of understanding with the United States, Tehran plans to collect fees covering navigation services, environmental protection, and ship insurance provided by Iran and Oman as the strait’s coastal states.

The MoU, set to be officially signed Friday in Geneva with Pakistan serving as mediator, gives vessels a 60-day toll-free grace period before the new fee framework kicks in. Fars, Iran’s semi-official news agency, cited an informed source saying the revenues are intended to fund Iran’s economic development, and the agreement explicitly enshrines Iranian and Omani sovereignty over the waterway.

The framework emerged from weeks of negotiations following the February 28 joint US-Israeli strikes on Tehran and other Iranian cities, which killed Supreme Leader Ayatollah Ali Khamenei and triggered an Iranian military response targeting Israel and US assets across the region.

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Iran’s subsequent tightening of control over the Strait of Hormuz, barring vessels affiliated with the US or Israel, sent oil prices sharply higher and ignited a global energy crisis that analysts warn could take months to ease even once the strait fully reopens.

Baghaei described the MoU as “merely a step toward reducing tensions and ending a war,” and made clear that deeper normalization remains a long way off.

Iran’s framing of the fees as a service charge rather than a toll is more than semantic. Tolls would imply a claim over passage rights in international waters, a legally fraught position. Fees for services rendered by coastal states sit on firmer diplomatic ground and are more palatable to the US, which needed language that wouldn’t provoke immediate pushback from allies or shipping interests.

Whether the practical difference amounts to much for the tankers and LNG carriers that move roughly a fifth of the world’s seaborne oil through the strait remains to be seen.

The deal’s final text reportedly underwent last-minute changes to more explicitly codify Iranian and Omani authority over future maritime management of the strait, a provision that Fars says appears more than once in the draft. Details beyond that have not been publicly released ahead of Friday’s signing.

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