Tehran’s Toll Booth: Will the World Let Iran Put a Price Tag on the Strait of Hormuz?

 

Is the world really going to stand by and allow Iran to hijack the Strait of Hormuz? If world governments allow this Iranian shakedown to happen, it will not only be a dereliction of duty—it could also send global trade into convulsions and drag the world back to pre-Egyptian levels of civilization.

 I have a simple question: When did the Strait of Hormuz become Iran’s private toll road?

Because that is what this increasingly looks like. Not diplomacy. Not ordinary maritime regulation. Not some innocent administrative fee collected by smiling bureaucrats carrying clipboards. We are talking about one of the most important waterways on Earth, with Iran seeking fees of 5% to 7% of cargo value while proposals are being discussed that could give Tehran significant control over vessels entering the Persian Gulf. Washington says there should be no fees. The global shipping industry is warning that the arrangement may be commercially and legally unworkable. 

I call that dangerous.

Very dangerous.

Is the world really going to allow the Iranian regime and the Islamic Revolutionary Guard Corps to turn the Strait of Hormuz into something resembling a Mafia-controlled street corner?

“Nice tanker you have there.”

“Beautiful cargo.”

“Would be a shame if something happened to it.”

Pay up.

That is the ugly picture now hanging over international shipping.

And the stakes are enormous. According to the U.S. Energy Information Administration, 20.4 million barrels per day of crude oil, condensate and petroleum products moved through Hormuz during the 1st quarter of 2025. By the 4th quarter, the figure was 20.7 million barrels per day. In 2024 and the 1st quarter of 2025, Hormuz carried more than 25% of the world’s seaborne oil trade and roughly 20% of global oil and petroleum-product consumption. About 20% of global liquefied natural gas trade also passed through Hormuz in 2024.

Think about that. This is not some creek behind Tehran. It is an economic artery. Squeeze it hard enough and somebody, somewhere, starts gasping.

China needs energy. India needs energy. South Korea needs energy. Europe watches energy prices. America watches gasoline prices. Factories need fuel. Trucks need diesel. Airlines need jet fuel. Petrochemical plants need feedstock. Ordinary families need affordable transportation, electricity and goods.

In 2024 alone, China, India and South Korea accounted for 52% of the LNG moving through Hormuz. About 83% of Hormuz LNG went to Asian markets. So when politicians treat Hormuz like a regional quarrel involving countries thousands of miles away, I wonder whether somebody forgot how globalization works.

Oil does not need a passport to create inflation. Neither does fear.

Markets understand this better than politicians. On August 7, 2026, Brent crude rose 1.03% to $83.34 per barrel and West Texas Intermediate rose 0.67% to $77.81 as markets worried about Iran’s plans for the strait. Brent had already jumped roughly $3 per barrel the previous day. Iran was considering fees as high as 7% of cargo value, while another proposal reportedly contemplated penalties reaching 20% for violations of restrictions.

That is what a geopolitical chokehold looks like when translated into dollars.

The legal issue matters too.

Article 38 of the United Nations Convention on the Law of the Sea (UNCLOS) establishes a right of transit passage through straits used for international navigation. It says ships and aircraft enjoy that right and that the passage “shall not be impeded.” Article 44 goes directly to the duties of states bordering such straits. The basic idea could hardly be clearer: international straits cannot simply be treated as private driveways whenever a coastal government gets angry.

There is an important wrinkle, and I will not hide it because inconvenient facts do not disappear when we shout louder. Iran signed UNCLOS on December 10, 1982, but has never ratified it. That complicates any simplistic claim that every Iranian restriction automatically constitutes a treaty violation by Iran. The broader argument therefore concerns the international-law regime governing navigation through international straits and the extent to which transit-passage rules reflect customary international law.

But that legal technicality does not make the strategic danger disappear.

And history has already given us the trailer for this movie.

During the Iran-Iraq War, the Persian Gulf became the stage for the infamous Tanker War. Merchant vessels became targets. Mines entered the water. Shipping became entangled with warfare. Eventually, the United States launched Operation Earnest Will, escorting reflagged Kuwaiti tankers. The operation ran from July 24, 1987, until September 26, 1988, and became the largest U.S. naval convoy operation since World War II. The IRGC Navy also resorted to mines.

History knocked on the door.

Apparently, nobody answered.

Now look at 2026.

Before Iran closed the strait following the outbreak of the U.S.-Israeli conflict on February 28, roughly 130 to 140 vessels were transiting Hormuz each week. During the first 4 days of this week, only 33 vessels passed through, compared with 50 during the same period the previous week. On Thursday, only 4 made the trip.

That is not an abstract geopolitical argument. Those are ships. Those are cargoes. Those are contracts. Those are factories waiting for raw materials. Those are economies waiting for energy. And those costs do not remain aboard the tanker. Eventually they walk into supermarkets, factories, airports and family budgets.

That is why I find the idea of legitimizing an Iranian toll system so disturbing and ridiculous. Iran is reportedly seeking fees equal to 5% to 7% of cargo value. Oman has discussed something closer to 3%. The United States rejects the idea of fees altogether. Shipping companies face another trap: Reuters reports that U.S. sanctions against the Iranian-established Persian Gulf Strait Authority create serious payment problems, while Lloyd’s Market Association provisions can terminate insurance coverage where vessels make such payments.

Wonderful.

A shipowner can potentially choose between geopolitical danger, sanctions trouble and insurance trouble.

Pick your poison.

That is not a functioning international shipping system. That is a hostage negotiation wearing a necktie. And this is where the world’s governments need to decide what principle actually means.

If a powerful state can turn its geographical position beside an international chokepoint into a permanent right to extort money from global commerce, what exactly is the principle we are establishing?

Today, Hormuz. Tomorrow, somebody else looks at another chokepoint and gets ideas. That is how international rules die. Rarely with trumpets. Usually with exceptions.

“Just this once.”

“Special circumstances.”

“Temporary arrangement.”

“Necessary compromise.”

Then temporary becomes normal. Normal becomes precedent. Precedent becomes entitlement. And suddenly everybody discovers that the rulebook has become toilet paper.

I am not arguing that every maritime charge is automatically illegal. Ports legitimately charge for services, and international maritime law is more complicated than a bumper sticker. Nor am I pretending military force is some magic wand. War around Hormuz could itself wreck shipping, kill people and produce exactly the economic catastrophe everyone claims to be preventing.

That is the bitter irony. The cure can kill the patient.

But recognizing that danger cannot mean accepting coercive control of an international strait as the new normal. Hence, sometimes the use of force is necessary to make a rogue country like Iran behave and understand that international law is not optional and that no country has the right to hold global trade hostage.

The truth is, this is not the work of the United States alone. The world needs to act now to restore safe, regular, and non-discriminatory commercial passage through the Strait of Hormuz. Not passage based on whether Tehran likes your flag. Not passage based on whether somebody has paid enough money. Not passage determined by whether a tanker captain has successfully navigated sanctions rules, insurance exclusions and political demands before breakfast.

Passage.

Period.

The International Maritime Organization has stressed free and non-discriminatory transit through the strait. That principle matters because Hormuz does not belong economically to Iran, Oman, America, China or anybody else alone. Geography placed the waterway where it is. Global commerce made it everybody’s business.

And I keep coming back to the same uncomfortable image.

A toll booth.

A tanker approaches.

The world holds its breath.

Somebody asks, “Who are you?”

Another asks, “What are you carrying?”

Then comes the question that should terrify every trading nation:

“How much are you willing to pay?”

That is where international commerce begins to look less like law and more like protection money.

Truth be told, if Iran is permitted to impose coercive control over Hormuz and demand payment simply for safe international passage, it is effectively placing a “contract” on the economic interests of every country dependent on that waterway. It tears at the principle of freedom of navigation and transit passage through international straits.

And if the world’s governments simply shrug? Then shame on them. That would not only be a dereliction of duty. It could send global trade into convulsions.

Civilization works because roads remain roads, contracts remain contracts, trade routes remain trade routes and rules remain rules. Once an international chokepoint becomes a protection racket, everybody pays.

Maybe first at the toll booth. Then at the gas pump. Then at the supermarket. Then everywhere else. And by then, the Mafia will probably be wondering why it never thought this big.

 

This article stands on its own, but some readers may also enjoy the titles in my “Brief BookSeries”. Read it here on Google Play or in Barnes & Noble bookstore: Brief Book Series.