Strait of Hormuz: Who gets through, who doesn’t, and can Iran charge ships for passage?
Tehran has turned the world's most critical oil chokepoint into a geopolitical lever. Here's how it's benefitting from it and how it decides to filter ships carrying oil and gas.
File photos of ships anchored outside the Strait of Hormuz (left); an India-bound tanker passing through the channel (Photos: AP/ANI) Strait of Hormuz blockade: On Friday, the LPG tanker ‘Jag Vasant’ arrived in India from Kuwait’s Mina Al-Ahmadi Refinery — after crossing the Strait of Hormuz. It was among only a handful of energy containers to transit the narrow maritime corridor since the US-Israel war on Iran that began on February 28.
Iran’s effective blockade of the Strait of Hormuz has emerged as its most effective strategic tool in the war, allowing it to maintain leverage and stonewall the US’s attempts to push for peace.
The disruption to this crucial shipping lane — which accounts for a fifth of global energy flows — has set off the worst energy shock the world has seen.
During the course of the war, Iran has been calibrating this effective blockade. It declared the lane closed for the US, Israel and its allies, but said the passage of ships belonging to non-hostile nations was permitted. Iranian Foreign Minister Abbas Araghchi, in fact, named India, China, Russia, Iraq and Pakistan as friendly countries whose ships will be allowed passage.
More controversially, however, Iran is looking at imposing a fee on ships in exchange for safe passage.
How will this toll work and is this legal? We explain.
First, how has Iran blockaded the Strait of Hormuz?
Before the war, more than 130 vessels passed through the Strait of Hormuz on an average each day. After the war broke out, that number dropped to three to four ships per day.
More than 20 commercial vessels have been attacked in and around Hormuz since the war began, and nearly 2,000 vessels are stranded close to the narrow strait, according to International Maritime Organization Secretary-General Arsenio Dominguez.
Iran Foreign Minister Araghchi said the strait remains operational for nations that have engaged with Tehran and are considered friendly.
“We have permitted certain countries that we consider friendly to pass through (Strait of Hormuz). We allowed China, Russia, India, Iraq, and Pakistan to transit,” Araghchi said, according to Iranian State TV.
“For some of these countries that we consider friendly, or in cases where we have decided to do so for other reasons, our armed forces have provided safe passage,” he said.
Iran FM Abbas ,@araghchi:
“We permitted passage through the Strait of #Hormuz for friendly nations including China, Russia, India, Iraq, and Pakistan”. pic.twitter.com/7pKYbHav3A— Iran in India (@Iran_in_India) March 26, 2026
On Wednesday, Iran’s Islamic Revolutionary Guard Corps (IRGC) said that shipping “to and from ports of allies and supporters of the Israeli-American enemies” is prohibited through any corridor or to any destination.
The IRGC said that the Strait of Hormuz remains closed and any transit through the waterway will face “harsh measures”, according to Iranian media reports.
Iran’s ‘toll-booth system’ in the Strait of Hormuz
An Iranian MP told Iran International that some vessels have been charged as much as $2 million to pass through. Iran has denied this. The Iranian Embassy in India posted on X on March 23: “In response to certain claims regarding the alleged receipt of a sum of 2 million dollars by the Islamic Republic of Iran from vessels transiting the Strait of Hormuz, it is emphasized that such claims are unfounded. The statements made in this regard merely reflect the personal views of individuals and do not, in any way, represent the official position of the Islamic Republic of Iran.”
Iran’s Parliament has also been reportedly discussing legislation to collect formal tolls from transiting ships. Though no such law has been passed yet, the powerful IRGC already appears to have put a “toll-booth system” in place, according to a report on Wednesday by the leading maritime industry publication Lloyd’s List.
“Since March 13, a total of 26 vessel transits through the strait have followed a route pre-approved under an IRGC ‘toll booth’ system that requires the ship operators to submit to a vetting scheme,” Lloyd’s List reported.
According to its report, while not all ships may have paid the “toll”, at least two have passed through the strait after paying a fee in yuan, with one transit brokered through a Chinese maritime services company acting as an intermediary.
The report also laid out how the IRGC system for passage through the strait works.
First, vessel operators contact intermediaries with IRGC connections prior to moving. They then submit the vessel’s full documentation, such as its ownership chain, cargo manifest, destination and a full crew list.
The intermediaries pass on the documents to the IRGC for what is described as “geopolitical vetting”.
“If the vessel passes the Iranian screening, the IRGC issues a clearance code and route instructions. Upon approach, the vessel will be hailed over VHF radio for verification of the codes, and a pilot boat is despatched to escort the ship through Iranian territorial waters, around Larak Island,” Lloyd’s List reported.
Is collecting formal tolls for the Strait of Hormuz legal?
No. Iran legally cannot stop ships from using the Strait of Hormuz or levy a “toll” to let ships through.
SECRETARY RUBIO: One of the immediate challenges we’re going to face is an Iran that may decide that they want to set up a tolling system in the Strait of Hormuz. Not only is this illegal, it’s unacceptable, it’s dangerous for the world. pic.twitter.com/fDWfgtfYZ1
— Department of State (@StateDept) March 27, 2026
This is because unlike the human-made Suez and Panama canals, for which Egypt and Panama legally charge fees, the Strait of Hormuz is a natural international strait.
According to Section 38 of the United Nations Convention on the Law of the Sea (UNCLOS), all ships (commercial and military) enjoy the right of transit passage. This means they can pass through the strait solely for continuous and expeditious transit between one part of the high seas (or EEZ) and another. Also, such vessels must not be a threat to the bordering nations (UNCLOS Article 39).
UNCLOS Article 38 specifies the international rules for transit right in a natural strait.
Article 44 of the UNCLOS states that coastal states — Iran and Oman, in this case — “shall not hamper” or suspend this passage.
Charging a fee is legally interpreted as “hampering” passage because it turns a sovereign right into a conditional permit. Attacking a ship for entering the strait is, obviously, illegal as per international law.
Gulf Cooperation Council (GCC) secretary general Jasem Mohamed Al-Budaiwi has said: “Closing the Strait of Hormuz & imposing fees is a clear violation of international law.” The Qatar Tribune quoted him as saying: “The GCC is the economic lung of the world — producing 22% of global oil. Its stability is essential for everyone.”
How is India getting oil through the Strait of Hormuz?
Since the war began, at least five ships have arrived in India through the Strait of Hormuz. These are the LPG carriers Pine Gas, Jag Vasant, Shivalik and Nanda Devi, and the crude oil tanker Jag Laadki.
On March 14, Iran’s ambassador to India, Mohammad Fathali, confirmed that Tehran had allowed some Indian vessels to pass through the Strait in a rare exception to the blockade. On the same day, India’s Ministry of Ports, Shipping and Waterways confirmed two India-flagged LPG tankers had crossed safely, heading for ports in western India.
On March 16, External Affairs Minister S Jaishankar said that there is no formal “blanket arrangement” for Indian-flagged ships, and that “every ship movement is an individual happening”.
On Tuesday, a senior government official said that the Indian government is not making any payments for the safe transit of Indian tankers out of the Persian Gulf through the Strait of Hormuz.
No permission is required from Iran either for the passage, although given the prevailing situation in West Asia, movements are being made based on safety assessments, said Shipping Ministry Special Secretary Rajesh Kumar Sinha.
The Consulate General of Iran in Mumbai on Thursday posted the photo of a message scribbled on what appeared to be a missile. The accompanying caption read: “Gratitude from Iran’s Aerospace Force to the people of Spain, Pakistan, India, and Germany for their support and solidarity; especially during the 83rd wave of missile response to the US and Israel.”
Gratitude from Iran’s Aerospace Force to the people of #Spain, #Pakistan, #India, and #Germany for their support and solidarity; especially during the 83rd wave of missile response to the U.S. and #Israel.#Iran#US#War pic.twitter.com/5QjqIBFiXj
— Consulate General of the I.R. Iran in Mumbai (@IRANinMumbai) March 27, 2026
The positive signals from Iran appear to be a result of India’s attempts to reach out to Iran, striking a balance in its approach after it initially appeared to side with Israel and the US.
In the last few weeks, India has spoken to Iranian President Pezeshkian twice and Foreign Minister Abbas Araghchi five times.
What Iran gains
While Iran is a signatory of the UNCLOS, 1982, it has not ratified the treaty, and therefore, refuses to acknowledge the law.
And if the toll law is passed in the Iranian Parliament, it will likely give it leverage over future negotiations as well. Such a transit toll will also act as a source of revenue amid its war against the US and Israel.
So far, Iran has demanded international recognition of its right to exercise authority over the Strait of Hormuz as one of its conditions for ending the war.
Iran’s control of the strait remains the nation’s strongest leverage against the US and Israel in the ongoing war in West Asia.
Abhishek Chakraborty is an Assistant Editor with The Indian Express in Delhi, working at the interse... Read More
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