As conflict intensifies in Iran and developments unfold rapidly across the Middle East, the prospect of imposing tolls on vessels transiting the Strait of Hormuz has emerged as one of the most consequential new challenges for global trade and energy markets. The discussion is not merely about how much a fee might be—but whether a new governance model could take shape for one of the world’s most vital maritime chokepoints, a passage that underpins international commerce.
The Hormuz Proposal
Iran and Oman—the two countries that control the shores of the Strait of Hormuz—are now jointly exploring the possibility of establishing a permanent toll system for ships passing through this critical sea lane. Oman, which has made clear it will not revert to the pre-war status quo, is studying how similar strategic waterways operate elsewhere, according to a Bloomberg report.
What International Law Says
Under international law, ships generally enjoy the right of ‘transit passage’ through straits used for international navigation—and coastal states are prohibited from charging fees solely for exercising that right. However, charges are permitted when tied to specific services provided to vessels, such as pilotage, traffic management, or environmental protection.
Oman is a party to the United Nations Convention on the Law of the Sea (UNCLOS); Iran is not.
Artificial Waterways: A Different Legal Framework
In contrast, man-made canals—such as the Suez and Panama Canals—operate under a distinct legal regime. They are considered sovereign infrastructure of the states that manage them, granting their operating authorities the right to levy transit fees.
The Panama Canal Model
Panama Canal tolls are calculated based on vessel size, type (e.g., container ship, bulk carrier, cruise ship), capacity, and whether the vessel is laden or ballast. According to data from the Panama Canal Authority’s Maritime Traffic division, costs range from roughly $200,000 to over $1 million for large commercial vessels. To avoid waiting, the canal also runs an auction-based priority booking system—potentially pushing total fees even higher.
The Suez Canal Model
Tolls for the Suez Canal are mandatory, given its artificial nature. The Suez Canal Authority calculates fees based on vessel capacity and cargo type. Current tariff levels—effective over the past two years—range from $30,000 to $450,000, with some large vessels paying up to $700,000. Recent adjustments, effective from 15 July, impose additional surcharges on tankers—particularly those carrying crude oil and refined products.
Other Key Chokepoints
The Bosporus Strait—linking the Black Sea to the Mediterranean—is governed by the Montreux Convention, which guarantees free passage for civilian vessels in peacetime and restricts military transit. No tolls are levied there.
The Strait of Malacca—a natural waterway shared by Indonesia, Malaysia, and Singapore—is also subject to the UNCLOS transit passage regime. While coordinated maritime safety initiatives exist among the three littoral states, no toll system has been implemented or proposed.