Iran plans to charge insurance fees to vessels in Hormuz after US deal expires

What Happened

Iran’s newly created Persian Gulf Strait Authority (PGSA) circulated a letter to the shipping industry outlining plans to charge insurance fees for vessels transiting the Strait of Hormuz after the 60-day Islamabad Memorandum of Understanding with the US expires. The letter states that insurance is currently free but reserves the right to impose fees, mandates transit routes via Larak Island, and threatens penalties for non-compliance. The PGSA, which is under US sanctions, claims authority over transit applications and permit issuance. Industry reactions are divided: Greek shipping magnate Evangelos Marinakis expressed willingness to pay a fee as an alternative to high war-risk premiums, while other owners and Greek Prime Minister Kyriakos Mitsotakis oppose any toll. Oman’s cooperation is critical, as its territorial waters border Iran’s; Omani officials have privately signaled openness to charging a fee under UNCLOS for safety and environmental services, despite US threats.

Key Actors

Why It Matters

The Strait of Hormuz is a critical energy chokepoint. Iran’s attempt to institutionalise transit fees threatens to replace military escalation with a legal-economic pressure tool, potentially reshaping norms for international shipping in strategic waterways and testing UNCLOS interpretations. The move could strain US-Iran relations and Gulf security, especially if Oman cooperates, and it exposes divisions within the global shipping industry.

Watch For

Expiration of the 60-day Islamabad Memorandum of Understanding; PGSA’s formal announcement of fee structures and enforcement mechanisms; Oman’s final decision on participating in a tolling regime; US diplomatic and military responses, including possible sanctions or maritime posture adjustments; shipping industry compliance and potential legal challenges at the International Tribunal for the Law of the Sea.