Iran begins "paid escort" in the Strait of Hormuz, categorized into five levels based on "friendliness."

According to people familiar with the matter, the Iranian Revolutionary Guard Corps has started charging “tolls” to passing vessels in the Strait of Hormuz, prioritizing the release of ships it deems “friendly countries,” while ships viewed as belonging to an adversarial camp may face threats or even attacks.

According to a report previously published by CCTV News, on March 30 local time, the National Security Committee of the Iranian Parliament passed a bill to charge vessels transiting the Strait of Hormuz. The proposed measures include implementing financial arrangements and a charging system in the form of Iranian rials; banning U.S. and Israeli vessels from transiting the Strait of Hormuz; maintaining Iran’s and its armed forces’ dominant position; banning countries that participate in unilateral sanctions against Iran from transiting; and Iran will cooperate with Oman to develop the relevant legal framework.

Bloomberg reported on April 1 that some shipping companies have received an “escort transit” plan offered by Iran. Recently, an oil tanker held up in the Persian Gulf was advised to switch to a Pakistani flag, after which it could leave the Strait of Hormuz safely under the escort of the Iranian navy. And according to a report previously published by CCTV News, on March 28, Pakistan’s deputy prime minister and foreign minister, Dar, said that the Iranian government has agreed to add the clearance of 20 Pakistani-flagged vessels to transit the Strait of Hormuz and plans to arrange two transits per day.

Citing multiple people familiar with the matter, Bloomberg said Iran has devised a rather “official” toll system for transiting the strait. If a vessel wants to pass safely, it must approach an intermediary company associated with the Revolutionary Guard Corps in advance and submit detailed information, including vessel ownership, vessel flag, cargo details, destination, and Automatic Identification System (AIS) data. The relevant documents will then be handed to the Hormozgan Province Command of the Revolutionary Guard Corps for background checks to confirm that the vessel has no links to the United States, Israel, or other countries Iran considers adversarial.

After the approval, both sides will negotiate transit fees. People familiar with the matter said Iran has set up a tiered mechanism, with five levels in total. The friendlier the country to Iran, the more likely it is to obtain more favorable terms. In general, the starting bid for an oil tanker transit-fee negotiation is about $1 per barrel, paid in RMB or a stablecoin. After payment is completed, the ship will receive a transit pass code and a designated route. The ship must raise the national flag of the country with which it has reached a transit agreement, and in some cases may even need to temporarily change its port of registry.

In the specific process, before entering the strait, the vessel must send the transit pass code via radio, after which Iranian patrol craft will escort the transit. Because the shipping channel is narrow and close to Iran’s coastline, industry insiders describe this mechanism as a “maritime toll booth.”

People familiar with the matter said Pakistan is in contact with major international commodity traders, asking whether they have vessels that can temporarily fly a Pakistani flag to obtain ship resources transiting the Strait of Hormuz, and is especially seeking oil tankers with larger cargo capacity, including supertankers with single-vessel oil carrying capacity of up to about 2 million barrels. At least two major oil trading companies have already received related invitations.

However, analysts believe that the international legal basis for Iran’s collection of transit fees remains unclear, and there are also risks in the process of discussing transiting the strait between vessel owners and the Revolutionary Guard Corps. In addition to risks to personal safety and insurance costs, it may also violate relevant sanctions or anti–money laundering regulations, further increasing compliance pressure on shipping companies.

Vessel-tracking data shows that the number of vessel transits through the Strait of Hormuz increased slightly over the past week, but it still remains only a small fraction of pre-war levels.

According to a report from Xinhua News Agency on March 13, since the outbreak of hostilities in Iran, the premium rates for passing vessels in the local area have risen sharply. During peacetime, they are generally around 0.25% of a vessel’s value; now they have climbed to 1% to 2%, while rates for relevant vessels related to the U.S. and Israel are the highest. The London insurance market Lloyd’s said war risk coverage covering the Strait of Hormuz has been available for purchase. However, many insurance brokers and shipowners said that currently no ships are willing to cross the Strait of Hormuz, not because they are worried about not being compensated if ships or cargo are damaged, but because they fear casualties.

Source of this article: The Paper

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