Iran is proposing a regional solution to the strait of Hormuz crisis that would involve at least some of the countries bordering the Mideast Gulf, according to a bill currently under discussion in parliament.
Part of that would involve charging a fee for vessels passing through the key waterway, with revenues from this available to all participating countries as 'war reparations'. "
Dubbed the 'law of strategic action for peace and development of the Persian Gulf,' the Iranian bill would govern Tehran's oversight and management of traffic through Hormuz, which has been severely disrupted since the start of the US-Israeli war against Iran on 28 February. Tehran's subsequent threats to any and all vessels it deemed to be 'unfriendly' led to traffic through the strait dropping to around seven a day in March, compared with typical daily movement of more than 100 before the war according to Kpler data.
Diplomatic engagement with several of what Tehran dubs 'friendly' countries has seen a slight pick-up in traffic through the strait, with more than 11 vessels crossing on average in the first eight days of April. Malaysia, Thailand, the Philippines and Iraq have all secured deals for passage with Tehran, and Islamabad last week said it had secured the safe passage of 20 Pakistani-flagged ships.
This pick-up came as Iran began introducing something of a toll system, whereby vessels would pay Tehran a fee to transit the waterway safely — a process first revealed by Iranian parliament member Alaeddin Boroujerdi in mid-March.
Speaking to Argus, Hamid Hosseini, spokesman for Iran's oil, gas and petrochemical products exporters' union, confirmed the toll mechanism remains in place.
"Every very large crude carrier (VLCC) transiting the strait has been paying $2mn, in line with what has been under discussion in parliament," Hosseini said.
The fee being charged is directly linked to the volume of oil on board, Hosseini said.
"Ship owners are being asked to pay $1 per barrel, and that can be done in the local currency, rials, or cryptocurrency, but only after the vessel has received a permit from the IRGC," he said.
Tidings for all
This mechanism appears to form the basis of how Iran sees the future of the strait of Hormuz, and its role as the guardian and guarantor of the key waterway.
"The Iranian government, in co-operation with the Iranian armed forces, is obliged to provide services, like navigation guidance and vessel inspection, as well as compliance and financial assessments," the bill says, specifying that vessels related to "warring countries" will, for the most part, be barred.
"The armed forces will determine which vessels are considered belligerent, and which are not," the bill says, stating that final say will come from the Supreme National Security Council (SNSC), one of Iran's most powerful decision-making bodies. Chaired by the president, the SNSC is responsible for national security, defense and major foreign policy strategy, and has been deeply involved in formulating Iran's war effort.
The bill reiterates vessels will need to pay a fee to transit Hormuz, either in rials or cryptocurrency, it says proceeds will not go to Iranian state coffers, but to what it calls a 'Persian Gulf Reconstruction and Development Fund' that regional countries can apply to join.
"The resources in this fund will be considered war reparations for Iran and other member countries, and be used for the reconstruction and development needs of the member countries," the bill says.
Gulf countries are yet to show appetite for this plan. Oman's transport, communications and information technology minister Said Al-Maawali on 8 April said the country is party to all international maritime conventions, which do not allow for the imposition of charges on passage.
The Iranian bill has secured approval from parliament's national security council, but has not yet been brought to the parliament floor for a vote, Hosseini said.
