The US says tolls on the Strait of Hormuz won't be accepted. Karoline Leavitt, White House press secretary, made that plain.
What's on the table
Iran has floated a plan that would let it charge ships for passage through the Strait of Hormuz — a waterway through which about one-fifth of the world’s oil moves, according to reporting by the Associated Press. The idea surfaced as part of a wider Iranian proposal tied to ending the war with the United States and Israel; Tehran has suggested using any revenue raised to help rebuild, the AP reported. Look, that proposal would reshape an ancient norm of seaborne trade — and the reaction has been fast and hostile.
The strait is narrow. It's strategic. And it's been at the centre of recent conflict that began on Feb. 28, according to the AP.
Legal barrier: freedom of navigation
That said, the United Nations Convention on the Law of the Sea — the treaty that most maritime nations accept — guarantees the right of "innocent passage" for ships that don't threaten coastal states. Under that framework, charging a toll for routine, peaceful transit would run up against established international law, legal scholars and maritime analysts told the AP. That's not just theoretical. The convention took effect in 1994 and still forms the backbone of modern maritime trade rules.
Changing how the strait is managed would represent a major legal departure from long-standing norms, with real consequences for international navigation. It would also hand Tehran durable leverage over a route that already carries outsize economic weight.
How Iran has already tried to exert control
After hostilities began, Iran tightened its grip on shipping. The AP says Tehran set up a vetting regime shipping analysts labelled a "tollbooth": vessels were diverted toward Iranian and Omani territorial waters, pushed to give detailed crew and cargo data to intermediaries linked to Iran's Islamic Revolutionary Guard Corps, and some ships were permitted to continue only after complying.
The AP reported that at least two vessels reportedly paid the equivalent of $2 million in Chinese yuan to gain passage.
Those moves have created tangible friction in trade flows. Asian buyers felt supply pain after the strait was used as a pressure point. Gasoline prices nudged higher in the US and Europe. And fertiliser and energy markets felt the strains — because when a route that handles 20% of global oil is uncertain, traders get jittery.
Diplomatic and commercial pushback
The White House has been blunt. Karoline Leavitt, White House press secretary, said President Donald Trump wants the strait reopened "immediately, without limitation," including a rejection of tolls, CNBC reported. "Trump's 'plain language' demanding the immediate reopening of the strait 'should be taken at face value,'" CNBC quoted Leavitt as saying. She added the United States has seen an uptick in traffic and expects navigation to resume quickly and safely.
Shipping firms and insurers are already acting cautiously. MarineTraffic, the ship-tracking service cited by CNBC, showed only limited movement shortly after a ceasefire was announced, and industry sources told CNBC most traffic remains thin compared with normal levels. Companies want clarity on who controls passage, how inspections will be handled, and whether fees will be demanded in hard currency or, as one report suggested, via cryptocurrency — an idea the Financial Times reported was under consideration for oil tanker transits.
Market consequences and finance angles
Financial markets hate uncertainty. The AP and CNBC both noted that reopening the strait without restrictions would ease some supply concerns that had pushed energy prices and the cost of fertiliser higher since the conflict began. But if tolling became accepted practice, it would add a new cost layer to crude shipments and could alter trading routes, insurance rates and shipping contracts.
Insurers are likely to charge more where they see elevated risk. Marine insurers already re-price risk when routes become politically unstable — and if Iran insists on inspections or payments, insurers will factor those added delays and exposures into premiums. That in turn raises freight costs and ultimately affects commodity prices. Traders would either absorb those costs, pass them to buyers, or reroute cargo around longer, more expensive passages — all of which have knock-on effects for refining margins and end consumers.
But rerouting isn't always practical in every case. The Strait of Hormuz is short but vital, and alternatives add days of sailing and extra fuel use.
A small added fee or delay can cascade through tight supply chains and already strained fuel markets.
Operational confusion despite ceasefire
After a two-week ceasefire was reached, Tehran publicly said ships could navigate the strait safely during the pause, CNBC reported. Yet Tehran also conditioned passage on coordination with Iran's armed forces and "technical limitations," which left shipping companies in a holding pattern. MarineTraffic recorded two bulk carriers transiting in the first hours after the ceasefire, but overall traffic had not returned to normal levels, CNBC said.
Because of the uncertainty, firms are reluctant to route fully laden tankers through the area unless they get clear guarantees. Ship owners are watching port and insurance notices, while charterers and traders are looking for clear rules on inspections, payments and liability.
Who has said what
Karoline Leavitt, White House press secretary, has been the most visible American voice on the subject — reiterating the president's demand for an open strait and denying some Iranian state reporting that traffic had been halted. The Associated Press supplied much of the on-the-ground detail about how Iran allegedly began vetting and extracting payments from vessels after hostilities started on Feb. 28. The Financial Times reported that Iranian authorities may want fees paid in cryptocurrency and that inspectors will check ships for weapons — claims circulating in the industry and cited by CNBC.
Meanwhile, legal and maritime experts point back to the United Nations Convention on the Law of the Sea as the main legal barrier to any tolling scheme. Changing that norm would require broad international agreement — or a new reality on the water that other maritime powers were unwilling to accept.
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Karoline Leavitt, White House press secretary, said the president wants the strait "opened up immediately, without limitation," including a rejection of tolls.
This article was created with AI assistance.
