What Happened
- Iran has drafted legislation to impose tolls on vessels seeking safe passage through the Strait of Hormuz, with reports of individual fees reaching $2 million per vessel.
- Iran has selectively allowed or denied transit to ships based on flag-state nationality — ships from China, Russia, India, Iraq, and Pakistan were allowed transit on March 26, 2026, while others faced restrictions.
- Thailand's Prime Minister confirmed on March 28 a diplomatic agreement with Iran allowing Thai vessels to transit the strait.
- Legal experts widely hold that imposing fees or restricting transit passage through an international strait violates UNCLOS, though Iran has never ratified the convention.
- The crisis has been dubbed the "Tehran Tollbooth" and represents one of the most significant disruptions to global shipping since the strait's strategic importance rose in the 20th century.
Static Topic Bridges
Strait of Hormuz: Geography and Strategic Significance
The Strait of Hormuz is a narrow water passage connecting the Persian Gulf to the Gulf of Oman and the Arabian Sea. It is one of the world's most strategically important maritime chokepoints. At its narrowest, the strait is approximately 21–33 nautical miles (39–61 km) wide. The entire navigable channel lies within the overlapping territorial waters of Iran (to the north) and Oman's Musandam Peninsula exclave (to the south), with the UAE also holding part of the southern coastline.
- Only sea link between the Persian Gulf and the open ocean.
- More than 20% of global petroleum liquids and approximately 20% of global LNG trade transits this strait.
- Over 80% of the crude oil and LNG passing through heads to Asian markets (China, Japan, South Korea, India).
- The strait has two inbound and two outbound lanes, each approximately 2 nautical miles wide, separated by a 2-nautical-mile buffer zone.
- Coastal states: Iran (north), Oman's Musandam exclave and UAE (south).
Connection to this news: Because the navigable channel runs through the overlapping territorial seas of Iran and Oman, Iran claims the authority to regulate — and now charge for — passage, though international law strongly contests this.
UNCLOS and the Right of Transit Passage
The United Nations Convention on the Law of the Sea (UNCLOS), adopted in 1982 and entered into force in 1994, is the primary international legal instrument governing maritime rights. Part III (Articles 34–45) specifically addresses straits used for international navigation. Article 37 defines international straits as those "used for international navigation between one part of the high seas or an exclusive economic zone and another part of the high seas or an exclusive economic zone." The Strait of Hormuz squarely meets this definition.
- Article 38: All ships and aircraft "enjoy the right of transit passage" through international straits; this right "shall not be impeded."
- Article 44: States bordering straits "shall not hamper transit passage and shall give appropriate publicity to any danger to navigation or overflight."
- Transit passage covers both civilian and military vessels and aircraft, provided they proceed without delay and refrain from threat or use of force.
- There is no provision under UNCLOS for a bordering state to impose fees for transit passage.
- Iran's legal position: Iran signed but never ratified UNCLOS. It asserts a domestic law framework and claims authority under the 1982 Convention on the Law of the Sea only where convenient. Even so, transit passage rights are considered customary international law binding on all states.
- Beyond 12 nautical miles from Iran's coast, ships can use Omani waters — meaning Iran cannot enforce a toll on the full strait.
Connection to this news: Iran's toll proposal is widely seen as legally untenable under UNCLOS and customary international law, though enforcement in a conflict context creates practical ambiguity.
Iran's Maritime Strategy and the "Hormuz Advantage"
Iran has historically used the threat of Hormuz closure as a strategic deterrent during periods of tension with the US and its Gulf allies. The Islamic Revolutionary Guard Corps Navy (IRGCN) operates in the strait and has periodically seized or harassed commercial tankers. Iran's approach in 2026 — selectively permitting friendly states while blocking others — represents a evolution from threat-of-closure to active discriminatory transit management.
- Iran's military doctrine treats the Strait of Hormuz as a strategic asset to be leveraged against economic pressure (sanctions, oil embargoes).
- The strait's closure or significant disruption would impact global oil prices immediately — historical precedent from Iran-Iraq "Tanker War" (1984–1988) showed the economic consequences.
- States denied passage include those aligned with Western sanctions coalitions.
- Five countries explicitly allowed transit on March 26, 2026: China, Russia, India, Iraq, and Pakistan — all either strategic partners of Iran or politically non-aligned.
Connection to this news: Iran's selective transit policy signals a shift toward using the strait as active geopolitical leverage rather than a passive threat, fundamentally challenging the principle of non-discriminatory transit passage.
Key Facts & Data
- Width of Strait: Approximately 21–33 nautical miles at its narrowest; navigable shipping lanes are narrower.
- Coastal states: Iran (north), Oman's Musandam exclave (south), UAE (partial south).
- Global energy flow: Over 20% of global petroleum and LNG trade; 80%+ bound for Asia.
- India's dependence: ~40% of India's crude oil imports pass through the Strait of Hormuz.
- UNCLOS Articles: Article 37 (definition of international strait), Article 38 (transit passage right), Article 44 (non-impediment obligation).
- Iran and UNCLOS: Signatory but not a ratifying party; transit passage rights are also customary international law.
- Reported toll: Up to $2 million per vessel for "safe passage."
- Countries permitted on March 26: China, Russia, India, Iraq, Pakistan.
- Bilateral deals: Thailand secured passage through direct diplomatic engagement with Iran.