On 13 July President Donald Trump appointed the United States the ‘Guardian’ of the Strait of Hormuz. The US would ensure passage through the Strait, he announced, but would ‘as a matter of FAIRNESS’ demand a payment of 20 per cent of the value of the cargo carried by each passing vessel.
This could be up to $30 million per passage for a large oil tanker – an exorbitant amount and 15 times the sum Iran has reportedly demanded in tolls. It would be a reimbursement ‘for any and all costs necessary to do the job of providing safety and security to this very volatile section of the world,’ Trump added.
The president matched this announcement in the same post by re-imposing the US blockade of Iranian vessels and maritime traffic destined for Iran. In response, Iran confirmed that it would close the Strait again. In essence, this means that shipping has now returned to the status it had before the ceasefire agreed by the US and Iran in the Memorandum of Understanding (MoU) of 17 June.
Of course, international law does not allow any country, however powerful it may be, to appoint itself ‘guardian’ of the rights of all other states, and demand payment for such unsolicited protection. And the president’s move contradicts the statements of his senior officials, undermining US credibility in the region. Meanwhile the only viable solution to restoring shipping in the Strait of Hormuz remains a negotiated settlement.
Negotiations for control of the Strait
In the MoU, the US surprisingly conceded that Iran would restore freedom of navigation without charge ‘for 60 days only’. Afterwards, the MoU stated, Iran and Oman would ‘define the future administration and maritime services’ in relation to the Strait.
The MoU referred to international law and the interest of other Gulf states. But it also emphasized the ‘sovereign rights of coastal states in the Strait of Hormuz.’ Iran might be forgiven for thinking that by agreeing to this language, the US had caved in to its demand for control over the Strait. It has certainly behaved as if it does.
It is true, every coastal state enjoys sovereign rights over its territorial seas up to 12 nautical miles from its coast. However, where a strait used for international navigation traverses the territorial sea of any country, that state must grant unhindered passage to shipping of all flag states. There is therefore no room in international law for Iran’s attempts to extract tolls, or for a similar attempt by the White House.
Routes through the Strait
Iran persists in its claim to have moved the Strait’s sea lanes northwards, closer to its coastline and falling still further within its territorial waters.
But the original routing through the middle of the Strait was agreed as far back as 1966 with the International Maritime Organization (IMO) and cannot simply be changed by one state at the expense of all shipping nations.
The US and Oman, with the involvement of the IMO, responded to Iran’s claim by moving the sea lane southwards, hugging the Omani coast and mainly traversing its territorial waters. Iran has tried to oppose this US attempt to reduce its power over passage by mounting occasional missile and drone attacks against shipping seeking to use the US/ Omani route.
Traffic lanes are approximations based on maps from the Associated Press (accessed June 25, 2026) and the Institute for the Study of War and AEI’s Critical Threats Project, updated June 25, 2026. The ‘hazardous area’ is based on a map from Iran’s National Security Commission accessed via Lloyd’s List, 9 April, 2026.
Last week, Oman hosted negotiations on this issue, supported by mediation from Qatar and others and legal drafting from Europe. A compromise would have been obvious: to return to the approved, original sea lane towards the middle of the Strait.
To facilitate this, experts supporting the negotiations proposed a compromise on the ‘Malacca Strait model.’ In that busy shipping route, coastal states do not collect tolls merely for passage. Instead, a reasonable fee is collected for pilotage and perhaps the provision of navigational aids and other services, with the approval of the affected maritime states.
Control over this arrangement could be exercised by a joint Iranian and Omani body, perhaps with some international representation. It would ensure that the fees remain proportionate to the services rendered and that the scheme is administered without discrimination, for instance against ‘hostile flag-states,’ which might include Israel or the US.
However, Iran remained intransigent in the negotiations, and no agreement was reached.
Trump’s fees
President Trump’s new proposal to levy vast and disproportionate fees on shipping appears as if the US seeks to make money out of an emergency suffered by others, including those desperate for the importation of oil and fertilizers. In that respect it is reminiscent of the minerals agreement pressed onto Ukraine last year.
The president’s fees announcement was immediately opposed by the IMO, which emphasized that it opposes all charging of mandatory fees for passage through straits used for international navigation. Trump’s reference to the fact that Iran started this crisis by demanding tolls is not relevant. The fact that someone observes another stealing a car does not authorize that observer to steal one. Ultimately this crisis was brought about by the US and Israeli attack on Iran in February.
The Trump scheme is not realistic and will be resisted. It also further undermines the White House’s diplomacy in the Gulf. Secretary of State Marco Rubio stated in June, referencing international law, that no toll would be allowed for passage through the Strait. Trump’s governance by Truth Social has undercut this position, highlighting how capricious the US president remains and how little can be invested in the statements of his most senior diplomatic officials. Seeking to impose fees further damages maritime freedoms – but it also further erodes US credibility.
Rowing back
It is now expected that US Central Command (CENTCOM), the US military command responsible for the Gulf region, will have to row back on the president’s statement and announce that the proposed massive charge will be voluntary – and would only apply to ships requesting US convoying and air cover through the southern route. Perhaps certain flag states might be asked to contribute some voluntary funds to the US effort. Asian states and Europe might come under pressure to contribute.
Regardless, it is not clear that many shipowners will expose vessels worth up to $200 million and their crews to the risk of an opposed passage of the Strait, hugging the Omani coast under US naval and aerial protection. Would the US offer a guarantee of safe passage and insurance against Iranian attack in exchange for payment of the protection charge?
Even disregarding the risk, a charge of anything like 20 per cent of the value of the cargo would not be a commercially viable proposition for the shipowners and their clients.
The only realistic approach must lie in the resumption of negotiations to regulate shipping through the Strait. Other countries such as China could make a significant contribution by finally applying pressure in favour of restoring the maritime freedoms on which they also depend.
There can be no Iranian control of passage or tolls. But there can be a face-saving arrangement for limited fees charged in proportion to expenses made in assuring safety of navigation, protection against environmental damage, and other reasonable expenses. And Europe, with leadership from the UK, can take a role in securing freedom of navigation once a deal is finally done – without seeking to impose a charge upon the world in consequence.