Iran Says It's Not Charging "Tolls" on the Strait of Hormuz — Just "Service Fees" of $2 Million Per Ship. Trump Calls It "A Beautiful Thing"

Iran has found a way around the promise that the Strait of Hormuz would reopen "toll free." It's not charging tolls. It's charging fees. For services. That it invented. And the president of the United States called it "a beautiful thing."

The semantic trick

Iranian Foreign Ministry spokesman Esmaeil Baghaei:

"We do not charge tolls."

He then added that "services will be provided" that "require charging fees." Those services include:

• Navigational assistance
• Environmental monitoring
• Maritime management
• "Safe passage permits"
• Search and rescue readiness

Deputy Foreign Minister Kazem Gharibabadi told Iran's Mehr news agency that Tehran "is not seeking to collect tolls, transit tariffs, or transit permit fees" — just compensation for services provided "in cooperation with Oman."

The services are real in the same way that protection money pays for "protection." Ships that don't pay don't transit. The fee is $1–2 million per vessel, or the equivalent of $1 per barrel of oil carried. At pre-war Saudi export volumes of 5.5 million barrels per day through Hormuz, the implied annual cost to Saudi crude alone is approximately $2 billion.

The Persian Gulf Strait Authority

Iran didn't just rename a toll — it built an entire bureaucracy to collect it.

The Persian Gulf Strait Authority (PGSA) was established on May 5, 2026. Vessels seeking transit must submit:

• IMO number
• Full cargo manifest
• Crew details
• Complete ownership chain
• Destination port
• Insurance documentation
• 40+ categories of vessel and cargo information in total

The PGSA issues a transit authorization upon receipt of payment. Accepted currencies: Chinese yuan and bitcoin. No dollar-denominated payments are processed through the system. The IRGC processes clearances via VHF radio in the strait itself.

The U.S. Treasury's OFAC sanctioned the PGSA, characterizing it as a renewed IRGC revenue extraction scheme. Iran responded by continuing to operate it.

The legislative trap

Iran's parliament codified fee collection into domestic law on March 30–31, 2026 — the "Strait of Hormuz Management Plan." This was before the April 8 ceasefire, before any MOU draft existed, and before the June 14 framework agreement. The legislation:

• Formalizes "Iran's sovereignty, control and oversight over the Strait of Hormuz"
• Creates a permanent revenue stream through fee collection
• Mandates a transit ban for U.S. and Israeli ships
• Restricts passage for nations participating in unilateral sanctions against Iran

By the time the MOU banned "tolls," the law authorizing "fees" was already on the books. The MOU prohibits the word. Iran's parliament codified the thing under a different name.

The 60-day shell game

The June 14 framework agreement — Trump's self-declared triumph — contains a critical ambiguity:

• Trump declared the strait would reopen "toll free" and wrote: "I hereby fully authorize the toll free opening of the Strait of Hormuz"
• VP Vance told CNBC the U.S. expects the waterway to remain toll free permanently
• Iranian state media reported the toll-free period extends only 60 days, after which Iran and Oman would administer the strait "under their own arrangements"
• Iran's Foreign Ministry said the deal allows it to charge "maritime service fees" — not "tolls" — so the ban doesn't apply

The U.S. thinks it negotiated permanent free passage. Iran thinks it negotiated a 60-day grace period before the fee regime kicks in. Both signed the same document. The dispute over whether the world's most critical oil chokepoint stays open after two months is not resolved in the MOU.

Trump's position — all of them

The president has held every possible position on Hormuz fees:

Position 1 — Opposition (Truth Social):

"There are reports that Iran is charging fees to tankers going through the Hormuz Strait. They better not be and, if they are, they better stop now."

Position 2 — Enthusiasm (to ABC's Jonathan Karl, asked if he approved of Iran's plan to charge vessels):

"We're thinking of doing it as a joint venture. It's a way of securing it — also securing it from lots of other people. It's a beautiful thing."

Position 3 — Profit (Truth Social):

"Big money will be made."

He called it the "Golden Age of the Middle East."

White House press secretary Karoline Leavitt later said the idea would "continue to be discussed" but stressed the "immediate priority" was reopening the shipping lane "without any limitations, whether in the form of tolls or otherwise." The EU rejected the joint venture proposal outright. Greek Prime Minister Kyriakos Mitsotakis: "I don't think that the international community would be ready to accept Iran setting up a toll booth for every ship that crosses the strait."

What international law says

The 1982 UN Convention on the Law of the Sea (UNCLOS), Part III (Articles 34–45), governs transit through international straits:

• Article 26: "No charge may be levied upon foreign ships by reason only of their passage through the territorial sea." Fees are allowed only for specific services actually rendered, applied without discrimination
• Article 38: Ships enjoy the right of transit passage through straits used for international navigation
• Article 42: Coastal states may not adopt measures that would hamper transit

James R. Holmes, chair of maritime strategy at the U.S. Naval War College:

"There is no provision in international law for a coastal state charging for passage through a natural waterway, whether you call it a toll or a fee or whatever."

He added: "We do not pay to go through the Strait of Malacca or Taiwan Strait, for example." Simply rebranding a transit charge as a service fee would not make it legal.

The head of the International Maritime Organization stated: "Countries do not have the right to introduce tools or payments or charges on these straits."

Iran never ratified UNCLOS. It claims sovereign authority. Deputy FM Gharibabadi argued: "We are now in a state of war, and wartime conditions cannot be governed by peacetime rules."

No precedent in history

There is no post-1945 precedent for mandatory fees on a natural strait. The comparisons Iran and Trump invoke don't hold:

• The Suez Canal is a man-made waterway — Egypt built infrastructure that ships pay to use
• The Panama Canal is man-made with locks that require operation and maintenance
• The Strait of Hormuz is a natural waterway. Nobody built it. Nobody maintains it. There is no infrastructure to fund

Natural straits — Hormuz, Malacca, Singapore, Gibraltar, Bab el-Mandeb, Taiwan — do not charge transit fees. That has been the rule for the entire post-war maritime order.

Oman's refusal

Iran and Oman share territorial rights over the strait — it is 21 nautical miles wide at its narrowest point, and both countries have 12-nautical-mile territorial sea entitlements, leaving no high-seas corridor. But Oman refuses to impose tolls on its side. Oman's transport minister said the country had signed agreements prohibiting it from charging ships.

Iran talks about fees collected "in cooperation with Oman." Oman isn't cooperating.

The precedent threat

If Iran charges fees on a natural strait and the world accepts it, the precedent applies everywhere:

• The Strait of Malacca (Malaysia, Indonesia, Singapore) — 25% of global trade
• The Strait of Gibraltar (Morocco, Spain) — gateway to the Mediterranean
• The Bab el-Mandeb (Yemen, Djibouti, Eritrea) — Red Sea chokepoint
• The Taiwan Strait — already geopolitically contested

Experts warn: if a bordering state can transform a legal right of passage into a purchased license, every strategic chokepoint becomes a potential toll booth. The rules-based system that has governed maritime trade for decades collapses.

"Will never return"

The IRGC Navy declared:

"The Strait of Hormuz will never return to its former state, especially for the US and Israel."

Former IRGC commander Mohsen Rezaei: "After the war, Iran will no longer be like before the war. Iran will have a greater power in the region."

This is the outcome of Trump's Iran war. The strait that was open before the war now has a toll booth with a different name. The country that was contained before the war now operates a transit authority that accepts bitcoin and rejects dollars. The president who started the war calls the result "a beautiful thing" and wants a cut. And the 20% of the world's oil that flows through a 21-mile gap now flows at the discretion of a regime that says the rules have permanently changed — and the United States helped prove it.