Before Iran began charging for the Strait of Hormuz, the Strait of Hormuz was charging Iran — and no one was paying.
The Toll Booth and the Cannon
The Strait of Hormuz carries roughly one-fifth of the world’s oil. Since February 28, 2026, it has also carried a price tag. Iran’s parliament has passed legislation imposing transit fees of up to $2 million per vessel — payment in Chinese yuan or cryptocurrency, enforced by IRGC escort through a controlled corridor near Larak Island. Tehran frames this as sovereign revenue. International maritime law calls it illegal. Both may be missing the point.
The Strait of Hormuz did not become the world’s most critical energy corridor by accident or by Iranian design. British imperial policy secured Gulf oil concessions beginning in 1908, when the Anglo-Persian Oil Company struck oil at Masjid Soleiman in the mountains of Khuzestan, in Iran’s southwest. American capital followed after World War II, carving up Saudi Arabia, Kuwait, and Iraq under arrangements that guaranteed Western access to Gulf reserves at terms the producing states had no power to refuse. The tanker routes through Hormuz were engineered to serve European and American energy consumption. The legal architecture that governs them — including the UNCLOS transit passage regime — was negotiated by the same powers that built the demand. Iran did not invite this traffic. It absorbed the damage — poisoned fisheries, contaminated coastlines, depleted marine ecosystems, and the slow suffocation of a way of life — without ever being compensated for what it suffered over a century of ever increasing commercial and military traffic.
Denmark did this first
From 1429 to 1857, Denmark charged every foreign ship transiting the Øresund under threat of cannon fire. The fee lasted 428 years and ended only when Britain, Russia, and the United States paid Denmark to abolish it.
Iran’s parliament is aware of the analogy. It is not discouraged by it. Denmark collected for 428 years and was ultimately paid to stop. Iran has collected nothing for a century. The historical precedent, on this reading, favors Tehran.
The price of the Strait of Hormuz
The world has only a handful of chokepoints, and each has a different arrangement with money. Egypt earns $700–800 million per month from the Suez Canal — a waterway it built and owns — charging $200,000–$300,000 per tanker. Turkey collects $250,000–$350,000 per vessel through the Bosphorus and Dardanelles. Iran is now charging $2 million per vessel for the Strait of Hormuz.
The cumulative arithmetic is clarifying. Egypt has collected approximately $150 billion from the Suez Canal since 1975. Turkey has collected an estimated $4–5 billion from the Bosphorus and Dardanelles over the same period — constrained by a treaty that has effectively subsidized global shipping at Ankara’s expense for nearly a century. Iran has collected nothing — zero — over seventy years of absorbing the full ecological and social cost of commercial and military traffic transiting its coastline. Iran’s parliament has now calculated that its $2 million fee applied to pre-war Hormuz traffic would generate approximately $100 billion per year. Over those same seventy years, insurers — who border nothing, built nothing, and protect nothing — have extracted an estimated $75–$200 billion in premiums from the same corridor. The ledger has only ever been read from one side.
What the insurers make
The least discussed beneficiary of the Hormuz crisis is also the most profitable. Before the war, each voyage through the Strait of Hormuz cost operators $100,000–$200,000 in war risk insurance premiums alone. After February 28, premiums surged to 1% of hull value at the floor — implying $10–$14 million per voyage for a large tanker — levels not seen since the Tanker War of the 1980s. Vessels moving under IRGC clearance were in several documented cases paying their insurer more than they were paying Iran. Lloyd’s of London built no canal, controls no strait, fields no navy, and has fired no drones at anyone. It simply prices the risk created by others and collects the premium. The more catastrophic the situation is, the more it collects.
What the Strait of Hormuz costs Iran
The Persian Gulf is a semi-enclosed basin whose waters renew through the single opening at Hormuz only once every three to five years. Every contaminant a passing vessel deposits stays, accumulates, and compounds — making the Gulf among the most pollution-vulnerable bodies of water on earth.
Every vessel that has transited the Strait of Hormuz has made a deposit. Tankers discharge oily bilge water, bulk carriers lose fertilizer precursors that eutrophicate the nearshore zones where Iranian fishers work, chemical tankers leave behind industrial solvents and persistent pollutants, and every hull continuously leaches antifouling biocides and microplastics into sediments that take years to flush. These are not exceptional events. They are the operating baseline of a system moving 140 vessels and counting through a waterway whose cost has been allocated entirely to Iran’s southern fisheries — without negotiation, compensation, or acknowledgement.
Iran has the longest coastline of all eight Persian Gulf states, employing approximately 110,000 fishers whose yields have fallen by half in some areas within the past five years — a collapse documented by Iran’s own parliament. The Gulf’s marine life is in critical condition, with pollution levels several times higher than in other oil-producing regions and species approaching extinction.
The current conflict has layered an acute risk of this chronic damage. More than 85 large tankers are trapped in the Persian Gulf carrying at least 21 billion liters of oil. A major spill in this basin — whose confined geography and slow renewal make it uniquely vulnerable — would devastate coral reefs, mangrove forests, and seagrass meadows for decades.
Military vessels complete the picture and expose its architecture. Under UNCLOS, warships enjoy sovereign immunity and are explicitly exempt from their environmental protection provisions. The US Fifth Fleet has been based in Bahrain for decades. The carrier groups now surging into the region under Operation Epic Fury burn the same fuel, shed the same biocides, and discharge the same waste as the commercial fleet they escort — with zero legal obligation to the state whose coastline receives it. They also radiate high-intensity sonar through one of the world’s most ecologically sensitive corridors, in a shallow basin where sound propagates with force. The transit regime of the Strait of Hormuz was designed by Washington and Moscow in the 1970s to guarantee their navies uninhibited global access. The framework was not designed to protect Iran’s coastline. It was designed to protect the transit interests and profits of those who wrote it.
A different reading
There is a different way to read Iran’s $2 million fee. Not as extortion. Not as an act of war dressed in commercial language. But as the first attempt — however crude, however legally indefensible at first sight — to price what the Strait of Hormuz has always cost and never charged for. Every sovereign that has collected money from this waterway has done so for infrastructure it built or a treaty it negotiated. Iran is collecting for something else: for the coastline that absorbed the damage, for the fisheries that bore the burden, for the ecosystem that was never compensated, for seven decades of ecological debt the current legal order has no mechanism to acknowledge. What the law calls illegal and what history calls overdue are not always the same thing. Under this framework, Iran’s fee is the only transaction in this corridor that has ever been called illegal. The same operators who absorb $10–$14 million in war risk premiums per voyage as a routine cost of doing business draw the line at $2 million to Iran — not because the number is prohibitive, but because the recipient is. Whether paying Iran is the more morally coherent act than the alternative — continuing the arrangement that built that debt — is a question international law cannot answer, because international law was not designed to ask it.
The $2 million transit fee is considered illegal. Over a century of ecological destruction deposited into Iranian waters has no legal category at all. The law has a name for what Iran is doing. It has no name for what was done to Iran. The Strait of Hormuz has always had a price. Iran has been the only one paying — without a receipt, without recourse, and without anyone having the courage or the wisdom to call it a cost.
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Behrooz Ghorbanian