Iran ‘toll booth’ in Strait of Hormuz sends oil prices soaring | World | News

Iran appears to be positioning itself as the guardian of the Strait of Hormuz, the world’s most important passage for oil transportation. This maneuver could strengthen Tehran’s effective control over the vital waterway and formally establish its ability to maintain its own oil exports to China.

Iran’s communications to the United Nations maritime authority and reports from ships passing through the strait suggest the implementation of what appears to be a “toll booth” system. The ships must enter Iranian waters and be inspected by the Iranian Revolutionary Guard Corps. At least two ships reportedly paid the toll.

Since the beginning of the Iran conflict, traffic through the strait has decreased by 90 percent, causing global oil prices to soar and leading to severe shortages for Asian countries dependent on Persian Gulf oil transported through the strait.

Only around 150 ships, including tankers and container ships, have made the journey since March 1, according to maritime information firm Lloyd’s List Intelligence. This represents just a little more than one day’s traffic typical of the pre-war era. Data from analytics firm Kpler reveals that Iran’s Kharg Island terminal loaded 1.6 million barrels in March; this figure is largely in line with pre-war monthly loading volumes. The main buyers are small, private Chinese refiners that are not affected by US sanctions.

The majority of ships that have successfully transited in recent weeks were leaving the Gulf and heading east. Depending on ownership or flag registration, ships bound for Iran accounted for 24% of transits, ships bound for Greece 18%, and ships bound for China 10%. But closer examination shows that Iranian-linked ships accounted for 60 percent of transits in the early stages of the conflict and roughly 90 percent in recent days.

About half of these ships turn off their position-tracking radio identification systems before crossing and turn them back on when they reach the Gulf of Oman from the opposite side. Their caution and reluctance are completely understandable. At least 18 ships were hit and at least seven crew members were killed, according to the U.N. International Maritime Organization, which monitors maritime safety. The organization did not specify which country was responsible for the attack on the ships.

“Iran’s Revolutionary Guard has implemented a de facto ‘toll booth’ regime in the Strait of Hormuz,” says maritime information company Lloyd’s List Intelligence.

Under normal circumstances, ships use the two-lane shipping channel passing through the middle of the strait. However, ships are increasingly choosing alternative routes and heading north around Larak Island, positioning themselves within Iranian territorial waters and closer to the Iranian coast. Organizations that want their ships to have safe passage must provide comprehensive details about what Lloyd’s List Intelligence defines as “approved agents” of the Revolutionary Guard. This includes information on cargo, ownership, destination and all crew manifests. Once approved, the ships are assigned a code and provided with IRGC escort. According to Lloyd’s, oil shipments receive priority treatment and all ships undergo “geopolitical review”.

“Although not all ships pay direct tolls, at least two ships do, and payment is made in yuan,” Lloyd’s List said, referring to the Chinese currency.

It was reported that some ships were given passage permission after the diplomatic intervention. According to Lloyd’s, two Indian ships carrying liquid petroleum gas were allowed to pass.

On Tuesday, the IMO received a letter from the Iranian government stating that it had “implemented a number of precautionary measures to protect maritime safety and security”. The letter argued that Iran was operating within international legal frameworks.

Iran’s parliament is reportedly working on legislation to set official fees for certain ships passing through the Strait of Hormuz, according to local media reports.

Fars and Tasnim news agencies, both affiliated with Iran’s Revolutionary Guard, quoted lawmaker Mohammadreza Rezaei Kouchi as saying “the parliament is pursuing a plan to formally codify Iran’s sovereignty, control and surveillance over the Strait of Hormuz, while also creating a source of revenue through the collection of fees.”

The IMO condemned the ship attacks and called for a globally coordinated approach to guarantee safe passage through the strait while preserving freedom of navigation.

Sultan al-Jaber, who heads state-owned Abu Dhabi National Oil Co., made statements reflecting the UAE’s increasingly determined position as the conflict approaches a month.

“Weaponizing the Strait of Hormuz is not an act of aggression against a single country,” Al Jaber said at an event hosted by the Middle East Institute in Washington. he said.

“This is economic terrorism against every consumer, every family that depends on affordable energy and food. When Iran takes Hormuz hostage, every country pays the ransom at the gas pump, at the grocery store and at the pharmacy,” he said. “No country can be allowed to destabilize the global economy in this way.”

According to Article 19 of the UN Convention on the Law of the Sea, countries are obliged to allow the “innocent passage” of peaceful and compliant ships through their territorial waters. “There is no provision anywhere in international law to set up a toll booth and stop shipping. … This is Iran using the element it has now, which is control of the Strait of Hormuz,” said Sal Mercogliano, a maritime historian at Campbell University in North Carolina. Gulf Cooperation Council secretary-general Jasem Mohamed al-Budaiwi called Iran’s transit fee implementation “an attack and a violation of the United Nations’ maritime law treaty.”

The charges likely violate American and European sanctions targeting the Guard, a key authority that oversees Iran’s ballistic missile program and played a vital role in suppressing nationwide protests in January.