Not Dollar, Yuan, Or Ruble; Iran Proposes To Pay Strait Of Hormuz Fees In Iranian Currency

The strait, a key route for about 20% of global oil supply, has seen restricted traffic after Iran blocked it during the war. Tehran is also discussing a permit system with Oman.

Iran is considering charging transit fees for ships passing through the Strait of Hormuz, potentially payable in its national currency, the rial, as part of proposals to end the conflict with the US and Israel.

Source : Twitter

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Key points generated by AI, verified by newsroom

• Iran proposes charging ships transit fees in rials.
• Fees aim to be part of a peace deal framework.
• Strait of Hormuz is vital for global oil transit.
• Permit system proposed to regulate maritime movement.

Iran is considering a proposal to charge transit fees for ships passing through the strategically vital Strait of Hormuz, with payments potentially to be made in its national currency, the rial. The development comes amid Tehran’s broader proposals aimed at ending the ongoing conflict with Israel and the United States.

According to an update shared by Iran’s consulate general in Mumbai, the head of Iran’s Parliament National Security Commission indicated that a parliamentary proposal envisions collecting such fees in rials.

Key Shipping Route Under Spotlight

The Strait of Hormuz, a narrow 34-kilometre waterway between Iran and Oman, is one of the world’s most critical maritime corridors. It serves as the primary route for nearly a fifth of global oil supplies, along with other essential goods such as fertilisers.

Iran’s proposal suggests that any long-term peace agreement could include provisions allowing Tehran to levy fees on vessels transiting the strait. A senior Iranian official told Reuters that the charges would vary based on factors such as the type of ship, its cargo and prevailing conditions.

Permit System and Regional Talks

Iran has also been working on a framework with Oman that would require ships to obtain permits and licences before passing through the strait. Deputy Foreign Minister Kazem Gharibabdi said the measure is intended to facilitate, rather than restrict, maritime movement.

Oman has confirmed discussions with Iran on ensuring smooth transit but has not disclosed whether any formal agreement has been reached.

Limited Traffic, Uncertainty Over Enforcement

Since the conflict escalated, only a limited number of vessels have navigated the strait, after Iran’s Islamic Revolutionary Guard Corps blocked much of the traffic and reportedly fired on some ships. There have been unconfirmed reports of payments made by vessels to secure passage.

Global Implications and Enforcement Challenges

The proposal raises questions about enforcement, particularly given the ongoing hostilities involving Iran, Israel and the United States. Ensuring free passage through the strait could require significant international intervention.

Analysts suggest that China, as the largest importer of energy passing through the route and a country maintaining ties with Iran, could play a crucial role in influencing developments.