Navigation through the Strait of Hormuz may be entering a new phase of change precipitated by the U.S. and Israel’s Operation Epic Fury. Unrelated to the two-week ceasefire announced on April 8^th, which has not resulted in open commerce of ships, Iran is providing information to shipping companies about the tolling framework they’re seeking to establish. Although the flow of ships through the strait has not returned to anywhere near the average of 150 daily tankers that traversed the strait prior to February 28^th 2026, several dozen ships have now reportedly paid the toll and crossed the channel safely.

The “Tehran Toll Booth” protocol enables safe passage in coordination with Iran’s Islamic Revolutionary Guard Corps, detouring ships to the north of the traditional shipping corridor, directing ships around Iran’s Larak Islands, closer to the Iranian coast. Any attempt to navigate the strait outside of this protected corridor would risk the mines that have been allegedly lain or attacks by Iranian forces. Reports suggest that the cost to traverse this corridor is equal to between $1 to $2 million U.S. dollars but reportedly paid in Chinese yuan or cryptocurrency. Access to this safe passage route is tiered, with Iranian ships passing freely, and access to the tolled passage limited to countries considered non-hostile to Iran. According to the Wall Street Journal, ships operated by Chinese, Greek, Pakistani and French owners have paid to cross.

The Trump Administration’s messaging in response to the Iranian tolling has been mixed. On Wednesday, President Trump told ABC News’ Jonathan Karl that he would consider entering a joint venture with Iran to charge tolls in order to secure the strait, and then posted on Truth Social that “The United States of America will be helping with the traffic buildup in the Strait of Hormuz. There will be lots of positive action! Big money will be made.” Then on Thursday he posted that “There are reports that Iran is charging fees to tankers going through the Hormuz Strait — They better not be and, if they are, they better stop now!” Secretary of State Marco Rubio has previously stated that with regard to tolling the strait “Not only is this illegal, it’s unacceptable, it’s dangerous for the world. And it’s important that the world have a plan to confront it.”

Setting aside the question of danger or unacceptability, the question of whether or not tolling the strait is in fact illegal under international law is a somewhat complicated and contested topic. The Strait of Hormuz is a natural waterway connecting the Persian Gulf to the Indian Ocean. It is located wholly within the territorial waters of Iran and Oman, but it is used for international navigation and no other route “of similar convenience with respect to navigational and hydrographical characteristics” exists for the Persian Gulf countries’ economic activities. These factors make clear that the Strait of Hormuz is an international strait under the United Nations Convention on the Law of the Seas, which is the legal framework for shipping on international waters that has been in effect since 1994.

Under that Law of the Seas Treaty, article 45 provides that “innocent passage” of international navigation be unimpeded, e.g. it makes clear that peaceful ships may not be blocked or tolled on an international strait. Coastal states are allowed to charge fees for certain services, e.g. docking at ports or providing navigation aid, but in order to prioritize the free movement of commerce, the treaty prohibits tolling the access to the strait. Moreover, any fees that are charged for services, per the treaty, must be charged without discrimination. Iran may seek to describe the “Tehran Tollbooth” as a fee for safe navigation aid, but on its face, the charging of navigation tolls, limited to friendly countries, would appear to run afoul of the UN Convention.

(Notably, the treatment of straits under the Treaty of the Seas is different from the treatment of canals with regard to tolling authority. Canals, as artificial waterways, are allowed to be tolled in recognition of the need for financing  infrastructure improvements. The toll revenue from these corridors can be very significant. For instance, in Egypt, the Suez Canal Authority reported they generated approximately $40 billion over 5 years from 2019-2024. However, the Suez Canal authority also makes large investments to maintain and improve the asset, such as the New Canal project completed in 2015 to expand the mileage of a double canal route and shorten the transit time from 18 hours to 11 hours for the southbound navigation. So for canals, tolls are a financing mechanism to facilitate commerce, whereas for straits, tolls are considered an impediment to commerce.)

But while the UN Convention on the Law of the Seas (UNCLOS) establishes the legal framework for international shipping and makes clear that an international strait such as the Strait of Hormuz could not be tolled under that framework, Iran has not ratified that UNCLOS treaty and therefore the relevance is uncertain. In 1982, when the treaty was established, Iran declined to ratify and provided an interpretative declaration specifically regarding the subject of straits. In that statement Iran noted that “Notwithstanding the intended character of the Convention being one of general application… only states parties to the Law of the Seas Convention shall be entitled to benefit from the contractual rights created therein” specifically pertaining to the “right of Transit passage through straits used for international navigation.”

In other words, Iran’s position is that the Law of the Seas Treaty should be interpreted as treaty law but not international law, and since Iran is not a party to the treaty, the country is not bound by the rules regarding passage through the strait of Hormuz. This is an important distinction because the U.N.’s Vienna Convention on the Law of Treaties from 1969 article 34 states that “A treaty does not create either obligations or rights for a third State without its consent.” But on the other hand, Article 38 of the same convention states that “Nothing in articles 34 to 37 precludes a rule set forth in a treaty from becoming binding upon a third State as a customary rule of international law, recognized as such.” So the question of whether Iran has the right to impose tolls comes down to whether the Law of the Seas treaty should be interpreted as a matter of international law, or merely treaty law binding on the ratifying countries.

(Interestingly, the U.S. is also not a party to the UN Convention on the Law of the Seas. The U.S. has historically considered portions of UNCLOS to be customary international law and binding on non-party states, but there are also elements to which the U.S. does not adhere, including the treaty’s seabed mining regime.)

As part of their 10-point peace plan, Iran proposed formalizing the tolls on transit through the Strait of Hormuz, with proceeds being split between Iran and Oman. It is unclear how Iran would administer the toll and whether the mines would be removed if such a toll were formalized. However, Oman has signed and ratified the UNCLOS treaty, and the country has publicly rejected the Iranian proposal for tolls.

While oil companies are reportedly seeking action to prevent the imposition of tolls in the Strait of Hormuz, any resolution to the current impasse could be better than a total blockade. The Persian Gulf countries may have the most to lose, and Bahrain has proposed a resolution backed by Qatar, the UAE, Saudi Arabia, Kuwait, and Jordan at the UN Security Council to reopen the strait by “all necessary means”. Economists suggest that the toll rate proposed by Iran could equate to approximately a $1 per barrel cost impact, but that the price would likely be borne by oil companies and not passed on to consumers. Outside of oil prices, control of the Strait of Hormuz would confer to Iran significant political power over other gulf states.

Should Iran achieve their goal and establish a legal tolling mechanism in the Strait of Hormuz, other international straits could seek to follow suit, although most of the straits critical to international shipping are bordered by coastal states that have signed the Treaty of the Seas. The Strait of Bab al-Mandab, which connects the Arabian Sea to the Red Sea (and on to the Mediterranean Sea via the Suez Canal) has also been discussed as a shipping chokepoint that could close in response to the war in Iran. Threats to that strait have been made by Houthi militants in Yemen, close allies of Iran, who have threatened to impede global shipping through the strait without regard for the fact that Yemen has signed the UN Convention on the Law of the Seas.

This brings us to an important final point. The U.N. Charter also prohibits the use of force against another country except in the case of self-defense against an actual or imminent armed attack or where authorized by the UN Security Council. If the world moves away from adherence to international laws and toward a philosophy of might makes right, the question of whether or not Iran has a legal right to impose tolls on shipping through the Strait of Hormuz may become irrelevant.