Energy markets shaken by Iran’s Hormuz transit plans
Editor’s note: Seymur Mammadov is a special commentator for News.Az and the director of the international expert club EurAsiaAz. The article reflects the author’s personal opinion and does not necessarily represent the views of News.Az.
Talks began in Pakistan on 11 April, in discussions that many hope will lead to a halt in the war in the Middle East. Yet a ceasefire alone will not resolve all issues. The current conflict has brought the question of international maritime transport corridors to the forefront.
As previously reported, one of the proposed conditions for a truce is the transfer of control over the Strait of Hormuz to Iran and Oman. Tehran no longer intends to allow vessels to pass free of charge under existing international maritime law.
The United States, for its part, does not oppose the idea of Iran charging up to $2 million per vessel. Washington itself does not depend on this route and could agree to such a concession without incurring direct losses.
Moreover, judging by the trajectory of developments, it may even stand to benefit from future arrangements.
However, the introduction of transit fees through the Strait of Hormuz is unacceptable to other countries.
French Foreign Minister Jean-Noël Barrot stated on France Inter that France does not support any initiative by Iran and the United States to impose charges on vessels passing through the strait, viewing it as a violation of the principle of freedom of navigation in international waters.
“This is unacceptable, because freedom of navigation in international waters is a common heritage of humanity that must not be restricted by any limitations or transit fees,” the minister said.
Earlier, Hamid Hosseini, a representative of Iran’s Union of Exporters of Oil, Gas and Petrochemical Products, told the Financial Times that the Islamic Republic intends to charge oil tankers $1 per barrel for passage through the Strait of Hormuz, while also reserving the right to inspect any vessel. He added that payments could be made in Bitcoin.
According to Euronews, payments could alternatively be made in Chinese yuan or cryptocurrency, both of which would allow transactions to bypass Western financial controls.
Source: marinepublic
At the same time, White House Press Secretary Karoline Leavitt stated during a briefing that the United States opposes Iran charging fees to vessels transiting the strait. However, notably, the possibility of Washington and Tehran implementing such a system jointly remains open to discussion.
The emergence of a commercial dimension in the Strait of Hormuz issue involving Washington could potentially contribute to stabilising the situation, but it would also create significant challenges for countries and companies relying on this corridor. Particularly noteworthy is that the idea reportedly originated with US President Donald Trump.
This initiative has sparked strong criticism within the European Union. According to Euronews, the European Commission considers such a move illegal and has firmly rejected any attempt by Iran or the United States to impose transit fees on vessels crossing the Strait of Hormuz. A Commission spokesperson said international law guarantees freedom of navigation, meaning no charges or duties should be levied.
The European Commission reacted to Trump’s proposal the very next day, issuing a strong call to restore free international navigation.
It is worth recalling that in an interview with ABC News, Trump proposed creating a “joint venture” with Tehran to introduce a paid transit system through the strait, stating that “this is a way to secure it and also protect it from many others”, adding in his characteristic style: “It’s a beautiful thing.”
Since the outbreak of the war, Iran has effectively restricted access to the Strait of Hormuz, allowing passage only to vessels belonging to countries it considers friendly. European nations are not included on that list, nor are several Middle Eastern energy-producing states. The disruption of passage through the strait has affected supply chains and contributed to a sharp rise in global energy prices. Oil prices began to decline only after reports emerged of a potential ceasefire.
What Iran is already doing, and what the United States is proposing to “refine”, runs counter to the United Nations Convention on the Law of the Sea. International maritime law constitutes a body of rules governing the use of the world’s oceans, their resources, and the legal status of maritime spaces. UNCLOS defines the boundaries of territorial waters, exclusive economic zones, and the high seas, as well as rules relating to navigation and environmental protection. The Convention strictly prohibits charging fees for innocent passage. Fees are permitted only where a specific service is provided, such as port access or technical assistance. It is notable that although neither the United States nor Iran has ratified the Convention, both have generally adhered to its principles.
According to most experts, introducing transit fees through the Strait of Hormuz would inevitably lead to similar measures in other international waterways.
Global maritime transport depends heavily on critical chokepoints such as the Bosphorus, the Dardanelles, the Danish Straits, the Strait of Gibraltar, Bab el-Mandeb, the Bering Strait, and the Gulf of Mexico. The key question is whether the countries controlling these waterways would continue to adhere to UN conventions if Iran and the United States were to begin jointly imposing duties on vessels transiting the Strait of Hormuz.
(If you possess specialized knowledge and wish to contribute, please reach out to us at opinions@news.az).
Similar news
