Iran’s proposal to collect tolls in the Strait of Hormuz violates trade norms

FRANKFURT, Germany (AP) — Where to end the war Iran, along with the United States and Israel, is demanding the right to collect tolls in the Strait of Hormuz as a precondition for reopening the waterway vital to the world’s oil supplies.

However, collecting tolls in the strait violates the fundamental and enduring principle of international maritime trade: freedom of peaceful navigation. This is an old idea, codified by the United Nations Convention on the Law of the Sea, which came into force in 1994.

Opening the Bosphorus will save the global economy supply constraints This has driven up energy and fertilizer prices sharply since the war began on February 28. But accepting Iran’s toll collection would strengthen the Islamic Republic’s control over the strait, through which 20% of the world’s oil is transported, and enrich the country opposing it. war was launched.

US President Donald Trump has made reopening the strait a priority. But the White House said Wednesday it opposes the toll, and analysts say oil producers in the Gulf also oppose it.

Analysts say they have not seen any change in traffic in the strait since the declaration of the ceasefire, despite the White House’s claims to the contrary.

Here’s what you need to know about Iran’s proposal and the international law it conflicts with.

Iran has already started loading ships passing through the Bosphorus.

After the United States and Israel launched the war, Iran immediately exerted influence by blocking the strait with attacks on ships and threats of attack, making passage very risky. The outage caused sudden shortages in some Asian countries that are highly dependent on the region’s energy, sent gasoline prices soaring in the United States and Europe, and threatened global economic growth.

Iran then began inspecting the ships in a shadowy scheme that shipping analysts have dubbed “toll booths.”

The ships were told to head towards Iranian and Omani territorial waters from the middle of the strait and instead sail around Iran’s Larak Island. After providing Iran’s paramilitary intermediaries with detailed information about the crew and cargo Islamic Revolutionary Guard CorpsSome ships were allowed to continue on their way, and at least two ships reportedly paid the equivalent of $2 million in Chinese yuan.

Law of the Sea Treaty guarantees passage to peaceful ships

Iran’s 10-point proposal to end the war includes a provision that would allow it and Oman to charge ships passing through the Strait of Hormuz, according to a regional official who spoke on condition of anonymity to discuss negotiations in which they were directly involved. The official said Iran will use the money it collected for reconstruction.

However, Article 17 of the Treaty on the Law of the Sea guarantees the right of “innocent passage” to ships that do not threaten coastal states. Allowing Iran and Oman to charge fees for passage through the strait would set a dangerous precedent, experts said.

Philippe Delebecque, a professor at Sorbonne University in Paris and an expert on maritime law, said freedom of navigation in the world’s seas has been a fundamental right for hundreds of years and is based on “the idea that the sea belongs to no one.”

“Freedom of passage has always been recognized, especially over the straits,” he said. The concern is that if the Strait of Hormuz can be closed, why not the Strait of Gibraltar between the Mediterranean and the Atlantic or the Strait of Malacca off the coast of Indonesia?

He described this scenario as “the end of the international community”.

Neither Iran nor the US have ratified the Law of the Sea Treaty

While 172 countries have ratified the UN convention, Iran and the USA are among those that have not ratified it.

“Not ratifying the convention does not give Iran full freedom of action in the Strait of Hormuz,” said Julien Raynaut, president of the French Association for the Law of the Sea, a trade group. “It remains subject to international law and, in particular, to this customary right of passage.”

Raynaut said a toll on Iran could lead him to conclude that China could restrict movement across the Taiwan Strait.

Constantinos Yiallourides, a senior research fellow at Britain’s Institute of International and Comparative Law, said Oman and Iran could face diplomatic pressure to comply with the convention.

He said free passage “is in everyone’s interest.” “We all want to buy the best products at the best prices.”

Global economy needs reopening of the Strait of Hormuz

Some economists say that from a financial perspective, the world would barely notice the additional cost of any toll on the Strait of Hormuz.

For example, a $2 million toll on a large tanker carrying 2 million barrels of oil means a $1 per barrel increase in that ship’s oil.

The Bruegel think tank in Brussels wrote: “The burden falls not on global consumers but on the Gulf countries, which mainly supply the oil passing through the strait.” He said the world economy would benefit immediately from reopening the strait, meaning 20% ​​of the world’s oil would return to the market and prices would fall.

Additionally, lowering oil prices would eliminate a multibillion-dollar geopolitical windfall for Russia, which has seen suddenly increased demand for oil despite sanctions.

The international price of oil rose to $118 per barrel on March 31, from about $72 per barrel before the war. On Monday, international benchmark Brent crude fell sharply to trade at $94.55 following news of a two-week ceasefire.

Gulf oil producers cautious about Iran controlling the strait

Saudi Arabia, the Gulf’s biggest producer, welcomed the ceasefire agreement between the US and Iran but called for the Strait of Hormuz to be kept open “without any restrictions”.

Gulf countries have had to shut down roughly 12 million barrels of crude oil production per day because there is no suitable way for much of their oil to pass through the strait. The two pipelines that pass through it are not large enough to replace all the lost oil, and new pipelines will take years to build.

Bruegel said that, given the disadvantages of the box office offer, Gulf countries would only accept it if all other options looked much worse.

One of the biggest objections in the West is that the tax would benefit the Islamic Revolutionary Guard Corps, which is responsible for Iran’s ballistic missile program, suppresses domestic political dissent, and is listed as a terrorist organization by the United States and the European Union.

___

Leicester reported from Paris. Michael Biesecker in Washington contributed to this report.