The foreign ministries of Iran and Oman issued a joint statement on Tuesday announcing the formation of a “Strait of Hormuz Committee,” which will “follow up future management of shipping in the Strait of Hormuz, the associated services to be provided, and the fees for the services, all in accordance with international standards.”
In other words, it looks like Iran and the nation on the far side of the strait are laying the groundwork to extort ransoms from international shipping.
Iranian state media claimed this month that while its Memorandum of Understanding (MOU) with the United States bars it from collecting “tolls” from ships passing through the strait for 60 days, the U.S. has supposedly “accepted” that Iran has the right to “collect fees for maritime services.”
“This principle is repeated elsewhere in the text. Iran will accept the passage of ships without charge, only for 60 days. This means the United States has accepted the principle of collecting fees, while securing only a 60-day exemption from Iran,” an Iranian government source said on June 15.
Iran’s state-run Fars news service said the regime in Tehran is dreaming up “safety, navigation, environmental, and insurance services” that it might charge “fees” for. Iranian Foreign Ministry spokesman Esmail Baghaei publicly confirmed that “maritime service fees” are on the table.
In May, Iran created an agency called the Persian Gulf Strait Authority (PGSA) that would “regulate” and “control” shipping through the Strait of Hormuz. The PGSA was clearly also intended to be the mechanism for extorting ransom from the world’s oil, gas, and cargo shipments.
One of the PGSA’s regulations for travel through the Strait of Hormuz is that all ships must have insurance policies that are approved by the Iranian regime. Tehran is supposedly issuing such policies “free” to every ship that complies with the PGSA, but could easily begin charging “insurance premiums” whenever it wants.
On Sunday, Iranian chief insurance regulator Mousa Rezai announced that a new insurance company had been created to deal exclusively in Strait of Hormuz policies. The International Maritime Organization (IMO) said no such company or insurance regulation has been submitted for its review.
Ship owners and maritime analysts quickly smelled a scam, noting that the PGSA’s own founding documents assert that it has “the right to introduce insurance fees in the future,” at which time ships will be forced at gunpoint to “purchase and renew coverage accordingly.”
Iran has also threatened to collect “fines” for ships that do not follow its convoluted instructions for navigating through the strait.
“The current Iranian proposal or directive is unacceptable and not workable for commercial shipping,” an industry insider told the New York Post (NYP) on Monday.
“No country can unilaterally assert its jurisdiction over international waters. That has to be respected. If it isn’t, you will not get transit back to pre-war levels. It’s not possible,” the source said.
Another shipping industry source noted that complying with Iran’s “insurance” scam would violate various international laws, including the remaining sanctions against Iran from the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC), and would put companies at the mercy of Iran’s erratic legal system.
According to the NYP’s sources, most shipping companies have resolved not to play along if Iran begins demanding insurance premiums. Their principle strategy for avoiding entanglements with Iran, however, is to hug the Omani cost of the Strait of Hormuz, staying within Oman’s territorial waters – and that strategy could be eliminated by Oman joining Iran in an alliance to extort shipping along both coasts of the strait.
Iranian and Omani officials have been discussing shared administration of the Strait of Hormuz and Gulf of Oman since May, including plans to cooperate on extracting fees from passing ships. Iranian officials claimed Oman originally rejected any such partnership, but has warmed to the idea over the past month, and might take point on convincing the Gulf oil states and their Western partners to accept a fee system.
President Donald Trump and other U.S. officials continue to insist that Iran (and presumably Oman) will not be allowed to charge money for safe passage.
“Iran has informed the U.S. that, despite troublemaking Fake News reporting to the contrary, there are ‘NO TOLLS, NO INSURANCE COSTS, & NO OTHER CHARGES OF ANY KIND BEING SOUGHT OR RECEIVED BY IRAN ON SHIPS TRAVELING THE STRAIT OF HORMUZ,’” Trump wrote on Truth Social on Wednesday.
“If this is false information, negotiations would end, immediately!” he added.
Secretary of State Marco Rubio, currently on a swing through the Persian Gulf nations to address their concerns about the Iran peace deal, also said on Wednesday that the world would not accept any effort by Iran to tax international shipping.
“It’s an international waterway. No country is allowed to charge tolls or fees on an international waterway,” he said.