Iran appears to be positioning itself as the gatekeeper of the Strait of Hormuz, the world’s most crucial passage for oil transportation. This manoeuvre could cement Tehran’s effective chokehold over the vital waterway and formally establish its ability to sustain its own oil exports to China.

Communications from Iran to the United Nations maritime authority, coupled with reports from vessels traversing the strait, suggest the implementation of what seems to be a “toll booth” system. Vessels are obliged to enter Iranian waters and undergo inspection by Iran’s Islamic Revolutionary Guards Corps. At least two ships have reportedly paid for transit.

Since the onset of the Iran conflict, traffic through the strait has plummeted by 90%, causing global oil prices to skyrocket and creating severe shortages for Asian countries reliant on Persian Gulf oil transported via the strait.

According to Lloyd’s List Intelligence shipping information firm, only around 150 vessels, including tankers and container ships, have made the journey since March 1. This represents just slightly more than one day’s typical pre-war traffic. Data from analytics firm Kpler reveals that Iran’s Kharg Island terminal loaded 1.6 million barrels in March, a figure largely in line with pre-war monthly loading volumes. The primary purchasers are small, private Chinese refineries that remain unfazed by U.S. sanctions.

The majority of vessels that have successfully passed through in recent weeks were travelling east, departing from the Gulf. Ships linked to Iran accounted for 24% of transits, Greece 18%, and China 10%, based on ownership or flag registration. However, closer examination shows that Iran-connected vessels made up 60% of transits during the early stage of the conflict, and in recent days, roughly 90%.

Approximately half of these vessels switch off their radio identification systems, which monitor their location, before passage, and switch them back on upon reaching the Gulf of Oman on the opposite side. Their caution and reluctance are entirely understandable. According to the U.N.’s International Maritime Organization, which tracks maritime security, at least 18 ships have been hit and at least seven crew members have been killed. The organisation did not identify which nation was responsible for attacking the vessels.

“Iran’s IRGC has imposed a de facto ‘toll booth’ regime in the Strait of Hormuz,” states shipping information company Lloyd’s List Intelligence.

Under normal circumstances, ships use a two-lane shipping channel through the centre of the strait. However, vessels are increasingly choosing an alternative route, travelling north around Larak Island, which places them within Iran’s territorial waters and nearer to the Iranian coast. Entities wishing for their vessels to have safe passage must provide comprehensive details to what Lloyd’s List Intelligence refers to as “approved intermediaries” of the Revolutionary Guard. This encompasses information about cargo, ownership, destination, and full crew manifests. Once approved, vessels are assigned a code and provided with an IRGC escort. Oil shipments receive priority treatment, and all vessels undergo “geopolitical vetting,” according to Lloyd’s.

“While not all ships are paying a direct toll, at least two vessels have, and the payment is settled in yuan,” reported Lloyd’s List, referring to the Chinese currency.

Certain vessels have reportedly been granted passage following diplomatic intervention. According to Lloyd’s, two Indian ships carrying liquid petroleum gas have been allowed to transit.

On Tuesday, the IMO received a letter from the Iranian government stating it “had implemented a set of precautionary measures aimed at preserving maritime safety and security.” The letter maintained that Iran was operating within international legal frameworks.

Iran’s parliament is reportedly working on legislation to establish formal fees for certain vessels transiting the Strait of Hormuz, according to local media reports.

The Fars and Tasnim news agencies, both affiliated with Iran’s Revolutionary Guard, quoted lawmaker Mohammadreza Rezaei Kouchi saying “parliament is pursuing a plan to formally codify Iran’s sovereignty, control and oversight over the Strait of Hormuz, while also creating a source of revenue through the collection of fees.”

The IMO has condemned the vessel attacks and called for a globally coordinated approach to guarantee safe passage through the strait while upholding freedom of navigation.

Sultan al-Jaber, who leads the state-owned Abu Dhabi National Oil Co., delivered remarks reflecting the UAE’s increasingly resolute position as the conflict nears its one-month mark.

“Weaponizing the Strait of Hormuz is not an act of aggression against one nation,” al-Jaber said in a speech for an event hosted by the Middle East Institute in Washington.

“It is economic terrorism against every consumer, every family that depends on affordable energy and food. When Iran holds Hormuz hostage, every nation pays the ransom, at the gas pump, at the grocery store and at the pharmacy,” he said. “No country can be allowed to destabilize the global economy in this way.”

According to Article 19 of the U.N.’s Law of the Sea Treaty, nations are obliged to allow “innocent passage” of peaceful, compliant ships through their territorial waters. “There’s no provision in international law anywhere to set up a toll booth and shake down shipping. … This is Iran using the element that they have right now, which is control of the Strait of Hormuz,” stated Sal Mercogliano, a maritime historian at Campbell University in North Carolina. The secretary general of the Gulf Cooperation Council, Jasem Mohamed al-Budaiwi, described Iran’s imposition of transit fees as “an aggression and a violation of the United Nations agreement on the law of the sea.”

These charges likely breach American and European sanctions targeting the Guard, a key authority within Iran that supervises its ballistic missile programme and played a vital role in suppressing nationwide protests in January.