Iranian parliament committee backs draft law to charge Strait of Hormuz tolls

Tehran’s parliament moved a step closer to monetising its most strategic maritime chokepoint on Monday, when the National Security and Foreign Policy Commission voted to endorse a draft law that would permit Iran to levy fees on vessels transiting the Strait of Hormuz. The commission’s approval, announced in a press briefing in Tehran, clears the way for the draft to be debated by the full Majles in the coming weeks, and could ultimately give Iran a new source of revenue from one of the world’s busiest oil‑shipping lanes.

The Strait of Hormuz, a narrow waterway linking the Persian Gulf with the Gulf of Oman, handles roughly 20 percent of global petroleum exports, including crude from Saudi Arabia, Iraq, the United Arab Emirates and Kuwait. Iran has long viewed the strait as a sovereign asset, but has traditionally refrained from imposing tolls, citing international law and the need to keep the passage free for all flag states. The proposed legislation would, however, grant the Iranian government authority to set and collect “transit fees” based on vessel size and cargo, a move that could reshape the economics of the route and trigger diplomatic push‑back from major oil‑importing nations.

The draft emerged amid a backdrop of heightened tension over Iran’s nuclear programme and regional rivalries. Since the United States withdrew from the 2015 Joint Comprehensive Plan of Action (JCPOA) in 2018, Iran has faced a cascade of sanctions that have strained its fiscal coffers and limited its access to foreign capital. Iranian officials have repeatedly signalled a desire to diversify revenue streams, and the prospect of charging for Hormuz passage aligns with broader efforts to tap into strategic assets for cash. Supporters in parliament argue that the fees would be modest, comparable to charges levied by other chokepoints such as the Suez Canal, and that they would fund infrastructure upgrades and bolster national security.

Opposition to the measure is not limited to foreign governments. Within Iran, some legislators and maritime experts warn that imposing fees could invite retaliation, including the targeting of Iranian shipping or the escalation of naval encounters in the narrow channel. The United Kingdom, the United States and the European Union have all warned that any unilateral fee could be deemed a violation of the United Nations Convention on the Law of the Sea, potentially prompting legal challenges or coordinated naval patrols. Moreover, the fee could complicate existing arrangements under the 1975 Convention on the International Regime of the Strait of Hormuz, which guarantees free navigation for all states.

If passed, the law would require the creation of a monitoring and billing infrastructure, likely overseen by Iran’s Islamic Revolutionary Guard Corps Navy, which already patrols the strait. The revenue model would depend on the volume of traffic—estimates suggest that more than 20 million barrels of oil pass through Hormuz each day, alongside a substantial flow of liquefied natural gas and container cargo. Critics contend that the administrative burden and potential for disputes could outweigh the financial upside, especially if shipping companies reroute around the strait to avoid fees, a scenario that would diminish Iran’s leverage.

For Taiwan and the broader Asia‑Pacific region, the development carries indirect but significant implications. Taiwan imports a sizable share of its energy needs via tanker routes that intersect the Indian Ocean and the Persian Gulf, and any disruption or cost increase in Hormuz could ripple through global oil prices, affecting Taiwan’s manufacturing sector and inflation outlook. Moreover, heightened geopolitical friction over the strait could lead to broader naval posturing by major powers, raising the risk of incidents that might spill over into adjacent shipping lanes used by Taiwanese vessels. Stability in Hormuz therefore remains a critical component of the supply‑chain security that underpins Taiwan’s export‑driven economy, making Tehran’s move a development worth close monitoring by policymakers and business leaders alike.