Is Iran's Proposed Strait of Hormuz Toll Deal Legally Valid?
Iran's proposed toll arrangement for Strait of Hormuz transit is almost certainly not legally valid under current international maritime law. Any deal involving a toll on an international waterway would require approval well beyond U.S. agreement alone—all member states of the International Maritime Organization (IMO) would need to vote on the proposal.
Tolling a natural body of water runs contrary to the United Nations Convention on the Law of the Sea (UNCLOS), the international treaty known as the "Law of the Sea," which the IMO oversees. When contacted directly, an IMO spokesperson stated via email: "The IMO has no comment" on the latest rumor of a deal between Iran and Oman.
It is highly doubtful the U.S. would agree to such a proposal. Despite this, Iran has already imposed an illegal toll system on the Northern passage of the Strait. Notably, some vessel owners and operators have defied U.S. opposition and paid the toll.
How Can You Tell Which Vessels Are Paying Iran's Transit Toll?
Bridget Diakun, Maritime Intelligence & Research Director for Lloyd's List Intelligence, explained during the organization's weekly Middle East and Russian waterways update that tracking flag registries offers a reliable proxy for identifying compliant vessels—even without direct visibility into payment records.
"Anyone wanting to know who's chatting with Iran in order to go through and who's not, is to look at the route their vessels take," said Diakun. "So, all those ships that are sailing along the Iranian-like prescribed route, they have had to have some level of conversation, be it through diplomatic channels or through that toll system."
According to Windward data, the flags of vessels currently traversing that Northern route include:
- Iran
- China
- Panama (consistently one of the dominant flag registries active in the wider Gulf and transit lanes)
- India
- Marshall Islands
- Vietnam
- Hong Kong
- Comoros
- Aruba
What Is the Current State of Attacks in the Strait of Hormuz and Red Sea?
Iran's announcement of a supposed deal has not translated into reduced hostilities. Since the announcement, the Islamic Revolutionary Guard Corps (IRGC) and its proxies have attacked numerous ships across the Strait of Hormuz and the Red Sea over the span of several days, according to UK Maritime Trade Operations and Ambrey. Two tankers have also been separately targeted in the Red Sea by Iran-proxy Houthis.
This pattern is consistent with prior cycles: Iran has floated the toll proposal before, and President Trump has rejected it each time.
What Do the Latest Strait of Hormuz and Red Sea Transit Numbers Show?
Red Sea Traffic
Lloyd's List data shows a 24% week-on-week drop in traffic by non-sanctioned, non-shadow fleet tankers in the Red Sea. Preliminary transit data shows:
- 91 vessels transited the week before July 20th
- That figure dropped to 53 the following week
Despite this decline, the data remains within the "normal range" and is considered currently "stable."
"The impact is certainly there," said Diakun. "But this is not a disruption across all the sectors and markets. Containerships are behaving normally. Bulk carriers have dropped, but that's quite typical for the bulk carrier market. It does fluctuate a lot week on week, so I wouldn't necessarily link it to this situation quite yet. Suez Canal traffic is completely unchanged in total volumes going through. The minor shift that we've seen right now is in tanker transits."
Strait of Hormuz Traffic
The Strait of Hormuz has been so constrained for so long that percentage-based improvements are misleading in isolation. Lloyd's List data recorded an 87% increase in total transits last week:
- Outbound voyages: up 63%
- Inbound voyages: up 122%
- Total transit volume: from 45 to 84 vessels
Iranian-linked vessels led transit activity. Focusing on non-Iranian-linked traffic specifically:
- Transits increased from 28 to 52
- 60% of those ships were exiting the Gulf; 40% were heading inbound
- 25% of this non-Iranian-linked traffic has been confirmed moving through the Omani system
Diakun cautions against reading this as a recovery signal: "Typically, in a normal week before all this happened, we'd be looking well over 700. This is not a trend. This is one data point. So, it's not indicative that owners are more confident in the situation right now. It's kind of an outlier."
How Many Vessels Remain Stranded in the Gulf?
According to Diakun, 70 vessels that arrived in the Gulf in February remain stuck. A further 65 ships that entered during the MOU period have not left since the agreement collapsed last month. The owner/operators of these vessels continue to incur:
- Daily war insurance fees
- Ongoing crew salary obligations
More critically, the seafarers aboard these vessels are living in life-threatening situations—a humanitarian dimension of the disruption that data alone cannot fully capture.
What Does This Mean for Liner Operators and Global Trade?
For major liner operators, the current environment offers little commercial incentive to return to Suez Canal routing. Neil Dekker, Senior Analyst at Infospectrum (part of Lloyd's List Intelligence), put it plainly:
"From a major liner operator perspective, the situation remains predictably unpredictable. There is no need to change their status quo from using their east-west services round via the Cape. Commercially, there is a good incentive for major liner operators not to go back through the Suez because obviously the longer transits mean that you have to add additional ships to each loop, which soaks up capacity. That's a positive thing for them commercially."
The bottom line: until the Strait of Hormuz and Red Sea return to genuinely normal transit conditions, the global shipping market should anticipate continued higher costs, slower trade, and ongoing supply chain disruptions.
Copyright: gCaptain | Written by Lori Ann LaRocco
