Strait of Hormuz tolls explained: Can Iran really make ships pay? What the global law says

Iran is reportedly moving to assert greater control over the Strait of Hormuz by charging toll on vessels passing through it and and asking them to coordinate with the Islamic Revolutionary Guard Corps to secure safe transit.

The key waterway located within Iran's and Oman's territorial waters is perhaps the world's most important energy shipping lane, with about 20% of the world's oil passing through it.

Iran effectively closed the strait following US-Israeli strikes on the country, and has demanded a right to collect tolls as a precondition to ending the war. And this would eventually push up prices of key commodities worldwide.

Sam Ori, executive director of the Energy Policy Institute at the University of Chicago, while speakinng to Politico said that Iran has “demonstrated that they can close it now … they plan to use that newfound capacity to implement a cost,” Ori said. “We’ve moved into a space where things are going to be a little bit more expensive for the foreseeable future.”

But, is the toll even legal?

Passage is innocent as long as it does not harm a country’s peace, order, or security. Activities such as military operations, serious pollution, spying, and fishing are prohibited.

Around 170 countries and the European Union have approved UNCLOS, but Iran and the United States have not.

Experts say, as reported by Reuters, “UNCLOS has become or is generally viewed as customary international law. Some non-ratifying countries may argue that they need not follow the treaty because they persistently and consistently object. Iran has argued that it has made such objections. The United States disputes Iran's authority to charge tolls.”

Countries and businesses have other potential means to counteract tolls.

A willing state or coalition of states could try to enforce the treaty. The UN Security Council could pass a resolution opposing tolls.

Companies could redirect shipments away from the Strait of Hormuz, and have begun doing so. Countries could expand sanctions targeting financial transactions believed to benefit Iran's government, by sanctioning companies willing to pay tolls.

However, Iran's 10-point peace plan does not include mention of such a joint venture. In fact it asked the US to remove force from the Middle East, lift sanctions on Iran, and the continuation of Iran’s control over the Strait of Hormuz.

Trump has also suggested the U. could impose its own tolls on vessels passing through the Strait of Hormuz, The Hill reports.