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The Economic Times
The Economic Times

Iran seeks long-term role in managing Strait of Hormuz, eyes billions in annual fees

Iran is seeking to reshape the future management of the Strait of Hormuz by introducing charges for security, safety and environmental services, a move that could generate as much as $40 billion annually for countries participating in the arrangement, The Wall Street Journal reported, citing officials familiar with the proposal.

According to the WSJ, Tehran is positioning the plan as part of the post-war order after the recent conflict in the Gulf, arguing that the management of one of the world's busiest energy shipping lanes cannot return to its pre-war structure. Iran is discussing the proposal with Persian Gulf neighbours as well as countries including China in an effort to build regional support, the newspaper reported.

"Everyone needs to know that management of the strait will never return to the way it was before," Iran's chief negotiator, Mohammad Bagher Ghalibaf, said during a visit to Oman this week, according to the WSJ.

The report said Iran is studying international precedents, particularly Turkey's management of the Dardanelles, where vessels pay a levy known as the "gold franc" to cover services such as lighthouses, sanitation and lifesaving. Tehran believes a similar framework could be adapted for the Strait of Hormuz, although it wants neighbouring Gulf states to participate and share revenues.

The proposal has drawn sharp opposition from Washington. During a visit to the Middle East, U.S. Secretary of State Marco Rubio said charging ships to use international waterways would be unacceptable. "The reality is that no country on earth has the right to charge for the use of international waterways, and that will never be an acceptable condition of any deal," Rubio said, adding that Gulf countries had also rejected the proposal, according to the WSJ.

The newspaper reported that the 60-day agreement ending hostilities requires Iran to clear mines from the strait and guarantees toll-free navigation during that period. However, the arrangement also gives Tehran a role in negotiations over the future administration of the strategic waterway, through which roughly one-fifth of global oil supplies normally pass.

According to the WSJ, Iran has already established an insurance company that it says vessels must use when transiting the strait and has instructed ships to follow designated routes, warning that travel outside those corridors is unsafe. Oman, meanwhile, has proposed a temporary toll-free shipping corridor along its coastline coordinated with the International Maritime Organization while broader negotiations continue.

The report said traffic through the Strait of Hormuz has begun recovering after the conflict, although some shipping companies remain cautious until a permanent agreement is reached. Insurance premiums have also eased in recent days, returning close to pre-war levels.

Legal experts, however, questioned whether Iran could implement such a system unilaterally. According to the WSJ, maritime law specialists noted that Iran is party to international agreements that prohibit imposing unilateral charges on ships using international waterways, and any service fee arrangement would likely require broad international backing through the International Maritime Organization.

The newspaper added that Iran has also discussed aspects of the proposal with China and Egypt, while some regional officials are examining whether cooperative security arrangements similar to those used in the Strait of Malacca could offer an alternative model for the future management of the Strait of Hormuz.

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