Iran charging vessels to transit the strait of Hormuz is illegal and a violation of a UN convention, Gulf Cooperation Council secretary general Jasem Mohamed Al-Budaiwi said today.
Iran effectively closed the strait by attacking commercial vessels shortly after the start of military strikes by the US and Israel at the end of February, and is now imposing fees on those wanting to transit the strait, Al-Budaiwi said.
"This is a violation of the UN convention of the Law of the Sea (UNCLOS)," Al-Budaiwi said.
Passage via the strait of Hormuz is dissimilar from Suez Canal and Panama Canal transits, through which Egypt and Panama legally charge fees, because it is a natural international strait rather than a manmade waterway.
UNCLOS allows "strait states" such as Iran to designate safe shipping lanes, but stipulates that these states "must not discriminate among foreign ships or, in their application, have the practical effect of denying, hampering or impairing the right of transit passage".
Despite this, Tehran is showing signs of plowing forward and formalizing a system to officially collect fees to ensure safe passage via the strait.
The GCC — made up of Saudi Arabia, Qatar, Kuwait, Bahrain, Oman and the UAE — will likely remain vocal in the near term about the imposition of fees by Iran because it threatens to continue to hamper shipments from the Mideast Gulf even after the end of the war. The payment of fees will also boost freight costs from the region and create new arbitrage opportunities for buyers sourcing outside of the Mideast Gulf.
