On the 30th local time, the National Security Committee of Iran's Majlis (Parliament) approved a draft bill proposing to charge fees for vessels passing through the Strait of Hormuz. The plan includes establishing financial arrangements and a toll collection system denominated in Iranian rials; banning the passage of U.S. and Israeli vessels through the strait; upholding the dominant position of Iran and its armed forces; prohibiting access to vessels from countries that impose unilateral sanctions on Iran; and cooperating with Oman to develop a relevant legal framework.
Notably, the plan stipulates that transit fees must be paid in Iran's official currency, the rial. The proposal covers several key provisions aimed at strengthening Iran's control and supervision over the Strait of Hormuz, including establishing security arrangements to safeguard the waterway, implementing measures to ensure maritime safety, and formulating relevant financial regulatory rules (with transit fees payable exclusively in Iranian rials). This controversial bill could fundamentally reshape operations in one of the world's most critical oil chokepoints and significantly raise risks of international confrontation and economic shocks. Iran's move is not merely about charging fees; crucially, it requires transit payments to bypass the U.S. dollar and be settled in its national currency. This directly breaks the long-standing convention linking oil trade with the U.S. dollar on the world's most vital oil artery. Large numbers of oil tankers passing through the strait, regardless of their flag, would be forced to use non-dollar payments, pushing more oil-related transactions outside the dollar system and reducing the dollar's usage and circulation in energy trade. At the same time, the move sends a signal to other oil-producing countries, accelerating the global trend of de-dollarization in oil markets. In the long run, this will continue to erode the foundations of the petrodollar and weaken the dollar's monopoly in global energy settlements.
The bill explicitly bans the passage of U.S. and Israeli ships, which could further escalate already tense relations. Prior to recent tensions, between 25,000 and 36,500 vessels passed through the Strait of Hormuz each year (70–100 per day). Over the past decade (2016–2025), an average of roughly 32,000 ships transited the strait annually, or about 89 per day, with oil tankers and LNG/LPG carriers accounting for the majority. Assuming half of these vessels are subject to tolls (44.5 per day) and an average fee of $150,000–$200,000 per ship, annual revenue could reach $2.4–3.2 billion - roughly comparable to the Suez Canal and Panama Canal. For reference, regular cargo ships and medium-sized vessels pay $50,000–$150,000 per transit through the Panama Canal, while large container ships pay around $300,000–$500,000. At the Suez Canal, bulk carriers pay $150,000–$350,000, oil tankers and LNG carriers $300,000–$600,000, and large container ships $500,000–$700,000 per passage.
Before Iran's parliament approved the bill to charge for strait transit, 22 countries issued a joint statement condemning Iran for violating the principle of freedom of navigation under the United Nations Convention on the Law of the Sea (UNCLOS). The 22 nations include Gulf states (the UAE and Bahrain), European countries (the UK, France, Germany, Italy, the Netherlands, the three Baltic states, four Nordic countries, the Czech Republic, Slovakia, Slovenia, and Romania), Japan, South Korea, Canada, Australia, and New Zealand. In response, Iran stated that neither the United States nor Iran is a party to UNCLOS and therefore is not bound by it. The 22 countries argue that the Strait of Hormuz is an international strait where "innocent passage" must not be impeded, and its governance is not for Iran alone to decide.
Under Articles 36 and 37 of UNCLOS, the right of transit passage applies to international straits, meaning all ships and aircraft enjoy the right of transit passage, which shall not be impeded. Article 44 requires states bordering the strait not to hamper transit passage and to duly publicize any dangers to navigation or overflight known to them. Transit passage shall not be suspended. Article 26 establishes the principle of non-fee collection: no fees may be levied on foreign ships solely on the ground of their passage through the territorial sea. Fees may only be imposed on foreign ships passing through the territorial sea as remuneration for specific services rendered to the ships, and such fees shall be levied without discrimination.
Tolling for passage through straits formed by artificial canals is not inconsistent with UNCLOS, mainly because their construction, maintenance, and operation incur substantial costs. Although Iran signed UNCLOS, it has never ratified it domestically. Thirteen other states are in a similar position, including the United States and the UAE. Fifteen countries, including Israel, have not even signed the convention. As a result, the aforementioned countries cannot resolve disputes through the International Tribunal for the Law of the Sea as provided for in the convention.
In an implicit response within the bill, Iran noted that it is "negotiating and cooperating with Oman to formulate a legal framework." In other words, the Strait of Hormuz, located between Iran and Oman, would be jointly administered by the two countries, with a joint management and toll system established under a bilateral legal framework. By treating the strait as a shared "quasi-canal," the governance logic would shift from an international passage to sovereign asset.
