Trump Proposes 20% Charge on Cargoes in Strait of Hormuz Amid Tensions with Iran
Overview of the Situation
On July 14, US President Donald Trump announced that the United States would impose a 20% fee on cargoes passing through the Strait of Hormuz following the collapse of a ceasefire with Iran. This strategic waterway, which is 34 km (21 miles) wide, is crucial as it facilitates the transit of approximately one-fifth of the world's oil supply and other essential goods, including fertilizers. The situation escalated after the US and Israel launched an attack on February 28, leading to a significant global energy crisis.
US Position on Hormuz Fees
Previously, on June 25, US Secretary of State Marco Rubio stated during discussions with Gulf nations that no nation has the right to impose charges for the use of international waterways. He emphasized that shipping fees would not be included in any agreements. However, Trump had hinted at the possibility of tolls if negotiations with Iran failed. In a social media post dated June 20, he mentioned that there would be no tolls during the ceasefire but indicated that the US might charge for services rendered as a 'Guardian Angel' in the region if the deal fell through.
Differences Between US and Iran's Demands
Iran prioritizes its control over the Strait in negotiations, viewing it as a vital strategic asset for its security. The country believes that the US had acknowledged this in the interim deal, which allowed for safe passage of commercial vessels without charges for 60 days. However, the US interpreted this as Iran's obligation to ensure safe passage without imposing restrictions. Iran has established the Persian Gulf Strait Authority, asserting that vessels must coordinate with it to pass through the waterway, and has targeted ships that do not comply.
Legal Aspects of Charging for Passage
The Strait of Hormuz consists of the territorial waters of both Iran and Oman, with the maritime boundary dividing the two. According to the United Nations Convention on the Law of the Sea (UNCLOS), bordering states cannot charge for passage through international straits, although they can impose fees for specific services. Neither Iran nor the US is a signatory to UNCLOS, but it is generally accepted as international maritime law. In 1968, Iran and Oman established a traffic scheme with the International Maritime Organization, which has since been complicated by Iranian mine-laying during the conflict.
Global Reactions to Proposed Fees
Shipping industry experts note that no recent unilateral attempts have been made to impose fees for strait passage. Oman has engaged in discussions with Iran and recently issued guidance indicating that vessels transiting through its waters would not incur fees. Gulf nations, heavily reliant on the Strait for energy exports, are particularly apprehensive about the potential for tolls. Major consumers of Gulf energy products may also be concerned about the implications of Trump's proposed 20% surcharge, which could significantly impact global oil prices.