Starting with Hormuz, Do We Nationalize Or Privatize The Seas?

Eurasia Review  |  Alejandro A. Tagliavini

Iran’s newly established Persian Gulf Strait Authority is attempting to impose transit fees on commercial vessels navigating the Strait of Hormuz, threatening to disrupt global energy supply chains. This unilateral monetization of a critical maritime chokepoint forces shipping companies to coordinate payouts or risk armed attacks by the Islamic Revolutionary Guard Corps.

Historically, the principle of free passage has underpinned international maritime trade, but this precedent could encourage other nations to weaponize geography across key straits like Malacca or Gibraltar. Furthermore, these transit fees violate the UN Convention on the Law of the Sea, creating severe insurance barriers because maritime underwriters refuse to cover transactions involving sanctioned Iranian entities. The strategic fallout of this monetization extends far beyond the Middle East, potentially intensifying sovereignty disputes in resource-rich regions like the Falkland Islands, where the upcoming Sea Lion oil project is already elevating the geopolitical value of southern sea routes amid growing great-power competition.

Comment

The establishment of the Persian Gulf Strait Authority represents a direct challenge to the transit passage regime codified under Article 38 of the United Nations Convention on the Law of the Sea. By attempting to monetise passage through the Strait of Hormuz, Tehran exploits the lack of a centralised enforcement mechanism within international maritime law to normalise state-level extortion. This precedent threatens to legitimise similar geographic weaponisation by coastal states bordering other vital chokepoints, such as the Bab-el-Mandeb or the Malacca Strait. Consequently, the commercial shipping industry faces a fragmented legal landscape where bilateral coercion supplants multilateral treaties, eroding the foundational principle of mare liberum.

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