SunSirs: Iran’s "Tehran Toll Booth" on Hormuz Strait

Against the backdrop of the ongoing tense situation in the Middle East and the failure of the second round of negotiations between the United States and Iran, Iran's conception of the passage mechanism for the Strait of Hormuz is shifting from a phased arrangement to a long-term institutionalized system. The oil tanker passage fee plan, which was originally seen as a transitional measure, has gradually solidified into a normalized policy due to the ongoing negotiations, attracting significant attention from the global energy market and the policy community.

The Guardian analysis suggests that this mechanism, referred to by the outside world as the "Tehran tollbooth," is ostensibly raising funds for post-war reconstruction, but in reality, it involves a redefinition of control over international shipping lanes, which could have a lasting impact on oil prices and the global economy in the coming years.

Iran proposed in its "10-point peace plan" that it and Oman would allow passage of ships through the strait for a maximum fee of $20 million. The plan was tried out earlier this month: All oil tankers seeking passage would have to submit detailed information, including cargo information, destination and final ownership, before paying a fee of at least $1 per barrel of crude. For an oil tanker that typically carries about 2 million barrels of crude, that would translate into a fee of up to $20 million for a single passage.

This arrangement quickly sparked legitimacy concerns. Under the United Nations Convention on the Law of the Sea, international straits, including the Strait of Hormuz, are supposed to ensure the "right of innocent passage" for ships, without which coastal states can unilaterally set restrictions or charges.

The United States also clearly opposes Iran's claims.

Meanwhile, the long-standing sanctions system imposed by the West on Iran has put large shipping companies in a compliance dilemma over whether to pay the toll.

However, for Iran, this "toll station" mechanism has obvious practical significance: on the one hand, the toll can provide a stable source of funds for post-war reconstruction and economic recovery; on the other hand, the control of the strait helps to restore its oil export capacity.

The deputy minister of labor and social security of Iran, Golamhossein Mohamadi, said that the war has led to the unemployment of about two million people. The Minister of Information and Communication Technology, Sattar Hashemi, pointed out that the internet outage causes at least 50 trillion rials (about $35 million) in economic loss every day. In this context, any new source of income is of great importance.

From a global economic perspective, the impact of the toll itself may not be significant. Economists from the Belgian think tank Bruegel calculated that the additional cost is mainly borne by the Gulf oil-producing countries, accounting for as much as 80% to 95% of the total, which is about $14 billion per year, and the direct impact on global oil prices is only between $0.05 and $0.40 per barrel.

But the deeper risk is that this approach could, in effect, strengthen Iran's control of international waterways and delay the restoration of energy supplies, thereby creating a lasting disruption to global market expectations.

The International Monetary Fund has warned that the global economy could be plunged into recession if the conflict escalates further, with the UK potentially feeling the impact more than other members of the G7.

Fatih Birol, the director general of the International Energy Agency, has already called the current situation the “worst energy supply crisis in history.”

The real cost pressures are expected to come from "hidden premiums": rising shipping risks driving up freight rates, higher insurance premiums for war risks, and doubled salaries for crew working in dangerous areas. All of these could significantly push up overall transport costs.

More crucially, the mechanism could impede the Strait's recovery to its pre-crisis levels of normal traffic. As one of the world's most critical energy chokepoints, the Strait of Hormuz moves some 20 million barrels of oil and oil products each day in the pre-crisis period. Once traffic is impeded, the market will quickly tighten.