Iran Is Charging Ships $2 Million to Cross a Strait It Legally Can't Close

Iran isn't just blocking the Strait of Hormuz. It's turned it into a toll booth. And at least one shipping company has already paid — about $2 million — to get their tanker through.

This is either a clever piece of wartime leverage or an illegal seizure of control over one of the world's most important international waterways. The answer is: probably both. Here's how it works, why it matters, and what it means that nobody can stop it.

What's actually happening

The Strait of Hormuz is a strip of ocean roughly 35 miles wide at its narrowest point, sitting between Iran to the north and Oman and the UAE to the south. Before the war started on February 28, around 20 million barrels of oil passed through every day — about 25% of all seaborne oil trade globally.

Since the war started, that flow has near-stopped. Fewer than 100 ships made it through all of March, compared to over 1,200 in the same period last year.

But here's what most coverage misses: the strait isn't closed in the way a locked door is closed. It's closed selectively. Iran's Islamic Revolutionary Guard Corps (IRGC) has built a ship registration and vetting system. Ships from countries that stayed out of the US-Israel military coalition — China, India, Pakistan, Malaysia, Iraq — can apply for passage. Governments negotiate directly with Tehran. Some get through. Some pay.

Lloyd's List reported that at least nine vessels have passed through Iran's narrow "approved corridor" near Larak Island since the war began. One of them reportedly paid around $2 million for that privilege.

The legal problem

Here's where it gets complicated. International maritime law — specifically the UN Convention on the Law of the Sea, known as UNCLOS — says Iran can't do any of this.

Under UNCLOS Articles 38–44, the Strait of Hormuz is classified as a transit passage zone. That means all ships from all countries have a guaranteed right to pass through it continuously, regardless of who controls the surrounding territory. No state can suspend that right, impose fees on it, or require ships to get permission.

There's a catch: Iran signed UNCLOS but never ratified it. That means Iran technically disputes the "transit passage" doctrine, preferring the weaker "innocent passage" standard, which gives coastal states more discretion. Most international legal experts say that position doesn't hold up — that even under customary international law, the transit passage right applies to Hormuz.

The legal analysis is on the shelf. Enforcement is a different matter.

Why other countries are paying

The short version: because they need the oil more than they need to make a legal point.

India's oil basket hit $156 a barrel in mid-March — far above the headline Brent price — because India buys a mix of heavier crudes and has been cut off from its Gulf suppliers. Pakistan faces a similar squeeze. China pre-stocked oil reserves before the war began (a diplomatic foresight that's now looking very deliberate), but still needs its tankers moving.

For these countries, $2 million per vessel is a lot cheaper than the alternative. And the alternative — waiting for the US military to reopen the strait by force — could take months.

This is why Iran's FM Abbas Araghchi described the situation to Japan's Kyodo News with complete clarity: "The strait is open. It's only blocked for enemy countries — countries attacking us, or their allies." He said it as a statement of fact, not as a threat.

The loyalty test

What Iran has built isn't really a blockade in the traditional military sense. It's a tiered sovereignty system, running in parallel with the actual war.

Tier one: countries allied with the US and Israel face a hard block. No passage, full stop.

Tier two: neutral countries — those who refused to join Trump's Hormuz coalition — can negotiate bilateral passage. Japan, which declined to send warships despite significant US pressure, is currently in active talks with Tehran. Japan's case has an additional layer of irony: the pacifist clause in Japan's own constitution, Article 9, which prevents it from sending warships to active conflict zones, was written by American occupation officials in 1947. The US-drafted law is now the reason Japan can't comply with US demands.

Tier three: everyone else may eventually pay transit fees. Iran's parliament is debating formalising the fee system into law. At least one tanker has already paid outside any formal legal framework.

What this does to international law

The Albis Perception Gap Index scored this story at 5.15 on the PM scan — the gap isn't in what happened, but in what it means.

Western coverage frames this as Iran "softening" under military pressure, a sign the US strikes are working. Regional and non-Western coverage frames it as Iran asserting permanent sovereign control over an international waterway — something no country has successfully done in the post-WWII order.

The legal reality sits somewhere between those framings. Iran hasn't "closed" Hormuz in any recognisable legal sense, but it has imposed conditions on access to a transit zone that international law says is unconditional. The fee paid by that one shipping company is small, but the precedent is enormous: if paying Iran to pass through Hormuz becomes normal practice, it rewrites the effective rules of international maritime law without a single treaty being amended.

The US knows this. Part of the military objective in the strait isn't just reopening oil flows — it's refusing to allow that precedent to solidify. Every day the selective vetting system operates, it becomes slightly more normalised.

What happens next

There are three possible resolutions, and none of them are clean.

The US reopens the strait by force. That would likely require ground operations to clear the IRGC systems controlling the Larak Island corridor — the same ground troops that military analysts are now openly discussing. The White House says no decision has been made. The USS Tripoli is already heading to the Gulf with 2,000 Marines.

Iran's fee system becomes permanent. Countries quietly pay, the US complains, and a new de facto order replaces the legal one. The strait stays "open" in the sense that oil moves — but Iran collects a cut of every barrel that passes through it. That's an income stream worth hundreds of millions of dollars a week.

A diplomatic framework emerges. France is pushing a UN-based mechanism to guarantee Hormuz passage post-conflict. Germany's Chancellor Merz said Germany could participate if there's an international mandate. Iran's conditions — that strikes stop first — remain unmoved.

The bottom line

Iran has converted a military chokehold into something more durable: an economic and political system where access to 20 million barrels a day of global oil flows runs through Iranian approval. One shipping company has already paid for a hole in international law. The question now isn't whether that precedent holds, but whether anyone has the will to undo it.

The US is trying to break the system by force. Most of the world is quietly trying to work within it. Which approach wins will shape how international maritime law functions for the next generation.

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For more on how different regions are framing the Hormuz crisis, read our Perception Gap analysis. Iran's selective blockade sits at the centre of the oil shock story reshaping global energy markets.