Strait of Hormuz shipping is moving from disruption risk to a new set of Iranian transit conditions, with immediate consequences for routing, insurance, and sanctions screening. In a note sent to the UN Security Council and circulated to the International Maritime Organization (IMO), Iran said “non-hostile vessels” may use the strait if they coordinate with Iranian authorities and comply with Iran’s “safety and security” regulations. Ships and assets linked to the United States, Israel, and “other participants in the aggression,” Iran wrote, would not qualify for “innocent or non-hostile passage.”
What Iran told the UN and IMO
Iran’s letter, transmitted during the current regional conflict, is an attempt to shift the Strait of Hormuz from a near standstill toward a selectively managed reopening. Reuters reported the note was sent to the 15-member Security Council and to UN Secretary-General António Guterres, then circulated among the IMO’s 176 member states.
The practical change is not simply “open” versus “closed.” Iran is setting conditions: coordination with “competent Iranian authorities,” and a political test embedded in the definition of “non-hostile.” That framing matters for shipowners because it creates uncertainty over who is considered eligible on any given day, and whether a ship’s ownership, flag, cargo, insurer, or prior port calls could be interpreted as “support” for hostile action.
How an IRGC “toll booth” model is taking shape
The Associated Press reported that ship operators and maritime data suggest Iran’s Islamic Revolutionary Guard Corps (IRGC) is operationalizing the policy into a gatekeeping process that resembles a “toll booth.” Under that system, vessels are increasingly routed into Iranian territorial waters, asked to submit detailed cargo and crew information through approved intermediaries, and—at least in some cases—charged fees settled in Chinese yuan.
AP cited Lloyd’s List Intelligence describing a “controlled corridor” approach: approved ships receive a clearance code and are escorted by an IRGC vessel. The same reporting said not all ships pay a direct toll, but at least two have.
This is still evolving, but the direction is clear: the cost of moving through Hormuz is shifting from pure security risk to compliance overhead—paperwork, screening, waiting for clearance, and the possibility of a payment channel that could collide with existing sanctions regimes.
Why the Strait of Hormuz shift matters for oil and shipping
Even before any toll structure becomes formally codified, the Strait of Hormuz matters because it is the main maritime exit for much of the Persian Gulf’s oil and gas exports. Reuters has described the current blockage and conflict disruption as affecting about one-fifth of global oil and liquefied natural gas shipments.
Compliance and sanctions exposure
A vetting-and-fee model creates a compliance problem for operators that are already navigating overlapping US and European sanctions. AP reported concerns that payments, intermediaries, and escorts involving the IRGC could raise sanctions exposure for shippers, traders, insurers, and banks that touch the transaction.
For cargo owners, that can translate into fewer willing carriers, tighter financing, and additional documentation demands—especially for energy and chemicals cargoes that require uninterrupted delivery schedules.
Insurance and routing costs
War-risk insurance is the bluntest day-to-day cost pressure. The Wall Street Journal reported war-risk premiums in the Gulf have risen sharply, with industry sources describing rates in the range of 5% to 10% of a vessel’s value for certain voyages—far above typical peacetime levels.
Shipping lines are also reporting direct operational impacts. Reuters cited Hapag-Lloyd’s CEO saying the company is facing $40 million to $50 million a week in additional costs due to higher fuel, insurance, and container storage charges, and that the company expects to pass those costs to customers.
Selective throughput risk
If Iran can decide which ships are “non-hostile,” throughput becomes selective even if traffic resumes. AP reported traffic through the strait has fallen sharply since the start of the conflict, with only limited transits compared with normal conditions, and noted that many vessels have disabled radio identification systems during passage.
Selective throughput is how supply disruptions persist without a total closure: fewer voyages, longer queues, and higher costs that show up as price moves, shortages, or delayed inventories downstream.
What’s documented and what’s contested
The documented element is the existence of Iran’s “non-hostile” framing and coordination requirement, as described in the letter reported by Reuters and echoed in other coverage.
The contested element is legality and enforceability. Under the UN Convention on the Law of the Sea (UNCLOS), ships in straits used for international navigation enjoy a right of “transit passage” that should not be impeded, and states bordering such straits have duties not to hamper that passage.
Separately, UNCLOS defines “innocent passage” through territorial seas and the limits under which a coastal state may treat passage as non-innocent.
Iran’s current posture blends these concepts by asserting conditions tied to security and conflict participation. AP reported that Gulf officials and maritime experts argue that a tolling model is inconsistent with the law-of-the-sea framework, while Iran argues its measures are precautionary steps to preserve maritime safety and security.
What happens next
Two tracks now matter for operators: paperwork and security.
On paperwork, the AP report described Iranian parliamentary discussion of codifying fees, which would formalize a structure that operators already say they are encountering in practice.
On security, the IMO has warned that attacks on merchant shipping and navigational hazards require an internationally coordinated safe-passage framework that preserves freedom of navigation and protects seafarers.
Markets are treating the risk as more than a one-off disruption. Reuters reported Barclays warning that a prolonged closure could imply a 13–14 million barrels-per-day supply loss, while also noting the uncertainty around duration and the possibility of normalization by early April under its base case.
For shipowners and cargo buyers, the uncomfortable reality is that “reopening” may still mean operating inside a permissioned corridor—with higher fixed costs and narrower choice—until the underlying security conditions and enforcement mechanisms change.