Iran advances plan to charge transit fees for ships passing through Strait of Hormuz

Iran's parliament is advancing a bill to charge commercial vessels transit fees in the Strait of Hormuz, framing the levies as "service fees" to bypass UNCLOS treaty restrictions. The move comes as shipping traffic through the chokepoint has plunged 95% following hostilities on February 28, 2026. Facing severe financial pressure and a record-low rial, Tehran is seeking hard cash just as US Treasury Secretary Scott Bessent prepares to launch a major new economic sanctions offensive.

Hormuz transit fee legislation

• ▪The Iranian Parliament's National Security and Foreign Policy Committee approved a bill on August 23, 2026, to impose formal transit fees on commercial ships passing through the Strait of Hormuz.
• ▪Hassan Ghashghavi, spokesperson for Iran's National Security and Foreign Policy Committee, stated that fees will be collected in rials or any other currency desired by Iran from ships authorized to pass through the Strait of Hormuz.
• ▪The proposed transit fees are framed by Iranian officials as service fees for maritime, environmental, refueling, insurance, safety, and navigation services.
• ▪The proposed Iranian legislation requires full parliamentary approval before it becomes law, though Iranian authorities have reportedly been collecting ad hoc payments of up to $2 million per vessel since early March 2026.

Iranian financial pressure

• ▪Security analyst Roger Macmillan stated that the Strait of Hormuz fee advancement is a sign of Tehran's dire financial state and need for hard cash under the pressure of US economic sanctions.
• ▪Iran's currency hit a record low of 2.02 million rials to the US dollar on informal markets around August 24, 2026, while the Central Bank of Iran maintained an official rate of 1.5 million rials.

UNCLOS legal framework

• ▪Under Articles 38 and 44 of the United Nations Convention on the Law of the Sea, Iran is prohibited from suspending, impeding, or charging tolls for vessels passing through the Strait of Hormuz, though it may charge for services provided.
• ▪The United Nations Convention on the Law of the Sea permits littoral states to charge fees specifically for services actually rendered to passing vessels.

Oil market disruption

• ▪WTI crude fell 1.3% to $85.93 a barrel and Brent crude eased 1.87% to $93.22 a barrel on August 24, 2026, as oil traders cautiously awaited the details of new US sanctions.
• ▪Shipping volumes through the Strait of Hormuz dropped by approximately 95% after hostilities broke out on February 28, 2026, severely disrupting global seaborne energy transit.

Persian Gulf Strait Authority

• ▪Iran implemented a temporary 60-day fee waiver initiative in June 2026 to encourage traffic back through the Strait of Hormuz, which expired in mid-August 2026.
• ▪Iran established the Persian Gulf Strait Authority in May 2026, a new government body tasked with managing vessel approvals and collecting transit fees.

US sanctions escalation

• ▪US Treasury Secretary Scott Bessent announced an economic offensive against Iran, termed an 'Economic D-Day,' scheduled to unveil new sanctions on August 24, 2026.
• ▪Mohsen Rezaei, secretary of Iran's Supreme National Security Council, warned that Tehran would treat countries cooperating with US economic pressure as enemies.

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