LONDON, July 15 — A proposal to impose a fee of $1-2 per barrel of oil equivalent on cargo ships transiting the Strait of Hormuz, with revenues earmarked for U.S. naval operations, remains stalled before the International Maritime Organization, according to officials familiar with the matter. The plan, first reported by Reuters in November 2024, would see a consortium of participating nations collect the surcharge.
Ships from countries that contribute to maritime security in the region, such as the United Kingdom and Japan, might have received exemptions under the proposed framework. The fee was modeled on a similar levy in the Bab el-Mandeb strait, proposed by the European Union in 2023.
That earlier proposal set a precedent for using transit fees to fund naval patrols in critical chokepoints of global energy trade. The Strait of Hormuz is a strategic waterway through which roughly one-fifth of the world’s oil supply passes. Any disruption to shipping there carries immediate consequences for global energy markets, a fact that has driven repeated naval deployments by Western powers over the past decade.
The proposal requires approval from the International Maritime Organization, a UN agency based in London. The record shows the IMO had not yet taken up the proposal as of the latest reporting.
The organization’s member states have not reached consensus on the legality or practicality of the fee. Critics, including the International Chamber of Shipping, have argued the fee violates the 1982 UN Convention on the Law of the Sea, which guarantees freedom of navigation. The legal argument is straightforward: the strait is an international waterway, and levying a charge on innocent passage would set a precedent that could be applied elsewhere.
Iran’s government has historically asserted its right to control traffic through the strait, a position that puts it at odds with the UN convention. Tehran has periodically threatened to close the waterway during periods of heightened tension with the United States and its allies. The fee proposal represents an attempt to shift the financial burden of maritime security onto commercial shipping rather than leaving it entirely to taxpayer-funded naval forces.
The U.S. Navy has maintained a continuous presence in the region for decades, with operations that include escorting commercial vessels and responding to Iranian harassment of shipping. Whether the IMO will take up the proposal remains an open question.
The agency operates by consensus among its 175 member states, and the fee faces opposition from both shipping interests and nations that view it as an infringement on maritime law. The Bab el-Mandeb precedent may offer a test case for how such fees would function in practice, but that levy has yet to be implemented either.
