Unlike the Strait of Hormuz, the Suez Canal and the Panama Canal are artificial waterways built and maintained by sovereign states at very high cost. Egypt collects billions of dollars annually from Suez Canal transit fees, and its right to impose those fees is guaranteed by the 1888 Convention of Constantinople. The revenue is used for the maintenance, operation, and modernization of the canal.
Iran has faced strong international criticism following reports that it has begun demanding up to $2 million from every ship passing through the Strait of Hormuz. According to Tehran, these payments are justified as compensation for damages caused during recent U.S.-Israeli attacks, as well as fees for navigation services, environmental protection, and additional security.
The Strait of Hormuz, located between Iran and Oman, is considered the most important energy corridor in the world. Before the recent conflict, approximately 20% of the world’s oil and gas consumption passed through the strait.
Iranian authorities have announced that they are working with Oman on a joint protocol under which vessels would be required to obtain permission before transiting the strait. While some smaller operators and shipping companies from Asia have reportedly agreed to pay, major international shipping firms have refused. The Institute for the Study of War (ISW) has described the fees as a form of “maritime extortion.”
The United States, China, and Gulf countries have openly opposed the practice, arguing that it violates international law.
WHAT DOES INTERNATIONAL LAW SAY?
According to the United Nations Convention on the Law of the Sea (UNCLOS), ships and aircraft of all nations have the right of transit passage through international straits that connect two parts of the high seas.
This means vessels may pass without interference, provided they proceed without unnecessary delays and do not anchor, except in emergency situations.
Coastal states do not have the right to block or tax such transit. They may only charge limited fees for specific services, such as pilotage or towing assistance. For this reason, legal experts argue that Iran has no legal basis for imposing general transit fees on ships passing through the Strait of Hormuz.
WHY ARE FEES ALLOWED IN THE SUEZ AND PANAMA CANALS?
Unlike Hormuz, the Suez Canal and the Panama Canal are artificial waterways built and maintained by sovereign states at enormous expense.
Egypt earns billions of dollars each year from Suez Canal transit fees, and its authority to levy those charges is guaranteed by the Convention of Constantinople of 1888. The revenues are used for the canal’s maintenance, operation, and modernization.
A similar situation exists in the Panama Canal. The Panama Canal Authority has the right to charge vessels for passage because the canal requires continuous investment and costly maintenance.
In both cases, the fees are considered payments for the use of man-made infrastructure rather than charges for navigating a natural maritime route.
ARE THERE ANY EXCEPTIONS?
In some cases, legal gray areas exist.
Russia, for example, charges fees for icebreaker escorts along the Northern Sea Route. Canada has made similar claims regarding the Northwest Passage, although these claims are disputed by the United States.
Likewise, Turkey, in the Bosporus and Dardanelles straits, may charge only limited fees for specific services but not for the right of passage itself.
WHAT IS EXPECTED TO HAPPEN?
The dispute over Hormuz transit fees remains one of the most sensitive issues in U.S.-Iran relations.
Washington insists that the strait remain completely open as an international waterway, free of charges and without requiring authorization from Tehran. U.S. President Donald Trump has stated that “the Strait will remain open to everyone because it is international water.”
The United States has urged shipping companies not to pay the fees demanded by Iran and has warned of sanctions against those cooperating with Iranian authorities.
Meanwhile, the United States and the United Nations are considering measures to guarantee safe navigation in the region, including international patrols and operations to clear naval mines. (DW)