According to Xinhua News Agency, Iran’s Permanent Representative to the United Nations Office at Geneva, Ali Bahreini, stated on June 23 that the Strait of Hormuz is now open for a period of 60 days, during which no fees will be charged.
In addition, Iran and the United States have decided to establish a communication mechanism on this issue to monitor and resolve any problems that may arise. After 60 days, the specific situation regarding the opening of the strait will be determined by the outcome of negotiations between Iran and the United States.
Iran has repeatedly expressed its intention to increase control over the strait. Recently, Iran established an insurance company specifically for the Strait of Hormuz. Experts point out that this requirement circumvents the US-Iran agreement and does not rule out Iran charging so-called “insurance premiums” in the future.
Iran and Oman issued an unusual joint statement on the 23rd, stating that the two countries held a meeting, emphasizing “their sovereignty and sovereign rights over the territorial waters of the Strait of Hormuz.” The talks also involved “services to be provided in this regard and fees related to them in accordance with international standards.”
US Secretary of State Marco Rubio said on the 23rd that the Strait of Hormuz is an international waterway, and no country can charge tolls. He stated that Iran will accept this, and regional countries “support the US view.” He is scheduled to visit the United Arab Emirates, Kuwait, and Bahrain on the 23rd and 24th.
The International Maritime Organization (IMO), the UN agency responsible for maritime shipping safety, stated that it is coordinating vessel transit with coastal states such as Oman. It remains to be seen how long it will take for shipping through the Strait of Hormuz to return to normal.
US and Iran talk past each other on Strait of Hormuz
Rubio’s visit to the three Gulf states is his first to the region since the outbreak of the US-Israel-Iran war in late February. US military bases in Gulf states were attacked by Iranian missiles during the war. He is trying to assure these US allies that the US will maintain a firm stance in peace talks with Iran.
Upon arriving in Abu Dhabi on the 23rd, Rubio stated that the US will guarantee freedom of navigation in the Strait of Hormuz, an international waterway, and that no country, including Iran, will be allowed to charge tolls for shipping through the strait.
However, Iran’s chief negotiator and Speaker of Parliament, Mohammad Bagher Ghalibaf, stated, “The Strait of Hormuz will never return to its pre-war state and will be managed by the Islamic Republic of Iran in accordance with international law and domestic arrangements.” Ghalibaf said Iran agreed to establish a coordination center and a communication hotline for vessel transit through the Strait of Hormuz to avoid conflicts and accidents in this strategic waterway.
Ship tracking company Kpler stated that 36 vessels passed through the Strait of Hormuz on the 22nd, the highest traffic volume since March 1.
On June 17, the US and Iran respectively published the official text of the Memorandum of Understanding reached between the two countries. Both sides committed to negotiating and reaching a final agreement within a maximum of 60 days, during which Iran will ensure free passage through the Strait of Hormuz. Afterwards, Iran and Oman will discuss with other Persian Gulf coastal states “the future management of the Strait of Hormuz and maritime services,” with relevant discussions following applicable international law and the sovereign rights of the coastal states of the Strait of Hormuz.
Observers believe this means there is no direct prohibition on Iran charging fees or providing services to vessels transiting the Strait of Hormuz. However, Rubio stated that he believes Iran will accept the terms of free passage through the strait, and “all countries in the region will agree with our view.”
The issue of strait transit is just one of the potential disagreements the US and Iran may face when reaching a future agreement. The two sides have differing views on issues such as Iran’s nuclear program and the release of Iran’s frozen assets. Rubio also pointed out on the 23rd that the conflict between Israel and Hezbollah in Lebanon could undermine the US-Iran Memorandum of Understanding, and that Iran’s regional proxies must also respect this agreement, with the Lebanon-Israel issue to be addressed at the “appropriate time in the negotiations.”
What is the potential waterway evacuation plan?
The International Maritime Organization (IMO) stated on the 23rd that it is currently initiating an evacuation plan aimed at allowing hundreds of vessels and approximately 11,000 stranded seafarers to transit through the Strait of Hormuz. However, the IMO did not provide a specific timeline.
IMO Secretary-General Arsenio Dominguez stated in a declaration: “This large-scale operation will be conducted in close cooperation with Iran, Oman, all coastal states in the region, the United States, and the maritime industry.”
Dominguez added that this operation marks “a decisive step towards restoring maritime security and ending unacceptable attacks on civilian vessels,” and daily reports on the number of vessels safely departing will be issued.
The current Traffic Separation Scheme (TSS) for the Strait of Hormuz was proposed by Iran and Oman and adopted by the IMO in 1968. This scheme designates shipping lanes for maritime traffic, aiming to reduce collisions and improve safety.
The Omani Ministry of Defense stated that the evacuation process under the IMO plan has been discussed for months and will be implemented in phases. In a notice, the ministry stated that due to the high risk of vessel collisions in the current environment, the evacuation of vessel traffic needs to be gradual and controlled. Currently, the TSS “cannot be used safely,” and vessels can leave the strait via two alternative routes south and north of the TSS. Coordinators, including the IMO, will contact individual vessels to inform them of their departure dates.
Additionally, Denmark announced on the 23rd that it will join the multinational escort plan led by France and the United Kingdom to assist in reopening this critical waterway.
After the outbreak of the US-Israel-Iran war on February 28, Iran effectively closed the Strait of Hormuz, disrupting the transport of global energy, fertilizers, and other key commodities. A major risk currently facing shipping is the low-cost, highly concealable mines in the waters surrounding the strait.
According to a report by CNN on the 23rd, after months of stranding, a large number of oil tankers in the Strait of Hormuz and nearby ports are struggling to resume navigation promptly due to severe “biofouling” on their hulls, meaning the attachment of barnacles, algae, shellfish, etc. Cleaning a single vessel requires several divers working continuously for hours.
No tolls, but insurance premiums?
Some experts believe that Iran is consolidating its control over the Strait of Hormuz through newly established institutions and procedures, with the intention of generating revenue from it.
Mousa Rezaei, head of Iran’s main insurance regulatory body, stated on the 21st that an insurance company specifically for the Strait of Hormuz has been established.
Furthermore, the Persian Gulf Strait Authority (PGSA), established by Iran in May, required late last week that vessels must hold a valid insurance policy approved by the authority, which is currently provided free of charge. This requirement emerged after the signing of the US-Iran Memorandum of Understanding.
Maritime historian and former merchant seaman Salvatore Mercogliano stated that the Strait of Hormuz will remain free for 60 days. After that, Iran could require vessels to pay insurance premiums through its newly established strait insurance company.
However, Iran’s new insurance policy may raise legal issues. Under international law, charging tolls solely for strait transit is illegal, while charging service fees (e.g., for tugboats or waste disposal) may be legal. Since March, Iran has been proposing the idea of charging fees for vessels transiting the strait, collectively referring to these fees as service fees, without specifying which services would be provided.
Richard Meade, editor-in-chief of the UK shipping trade publication Lloyd’s List, stated that the PGSA’s insurance requirement “effectively circumvents” the agreement between the US and Iran and paves the way for Iran to charge fees in the future.
An IMO spokesperson told The New York Times that the PGSA’s insurance requirement “has not been formally submitted to the IMO, nor has it been included in any official procedures or records.”
The spokesperson stated that coastal states cannot suspend or impede the right of passage for vessels through the strait, and there is no clear basis in international law to allow the mandatory collection of fees such as transit fees. However, the spokesperson did not rule out the possibility of “forming a cooperative mechanism among states to assist in managing the strait.”
The new insurance requirement also creates practical problems for shippers and vessels, as they must pay fees while avoiding potential risks. At the end of May, the US Treasury sanctioned the PGSA, calling it a new Iranian initiative “to monetize state-sponsored terrorism by extorting vessels.” The Treasury also warned against making payments to the PGSA, stating that doing so could expose relevant parties to sanctions.
