Strait up tolls? What a Hormuz precedent means for the world’s waterways

Australian Strategic Policy Institute | Elizabeth Buchanan, Adel Abdel Ghafar

The US–Iran War has triggered negotiations to keep the Strait of Hormuz toll-free, raising concerns that a potential transit fee could establish a dangerous global precedent. This development threatens to disrupt international maritime trade norms and directly impact Australian supply chains. Consequently, regional waterways face unprecedented economic and strategic pressures.

Historically, the dissolution of agreed international laws and maritime principles has accelerated the erosion of free passage. If a Hormuz toll is implemented, it could legitimise similar transit fees in other critical choke points. These include the Malacca Strait, the South China Sea, and the Bering Strait. Global trade faces fragmentation. Such a shift would allow coastal states to monetise sovereign access, fundamentally altering the economics of global shipping. Ultimately, this precedent risks transforming open maritime commons into contested, revenue-generating zones, complicating naval operations, energy security, and resource supply chains worldwide.

Comment

The erosion of the transit passage regime under the United Nations Convention on the Law of the Sea (UNCLOS) represents a fundamental challenge to maritime law. If the Strait of Hormuz negotiations normalise transit fees, the legal distinction between international straits and sovereign territorial waters will blur. Coastal states adjacent to the Malacca Strait could exploit this precedent to bypass Article 38 of UNCLOS, which guarantees unimpeded transit passage. This shift would transform treaty-based freedoms into transactional, state-controlled access agreements.

The downstream consequence of this legal erosion will likely manifest in the militarisation of toll enforcement mechanisms along key choke points. Coastal states may deploy anti-ship missile batteries or maritime militia vessels to police compliance, directly threatening the transit of non-paying commercial fleets. Consequently, the United States Navy and the Royal Australian Navy will face heightened tactical risks when conducting freedom of navigation operations through the South China Sea to challenge unilateral coastal levies.

Strategic Question for Discussion

If coastal states begin unilaterally enforcing transit fees in the Malacca Strait, how can the United States Navy and its allies uphold the legal protections of UNCLOS without triggering direct kinetic conflict?

The trajectory indicates that navies would be forced to transition from symbolic freedom of navigation transits to active, armed escort missions for commercial shipping. My assessment is that this shift would severely stretch the operational capacity of the Royal Australian Navy and partner fleets, forcing a strategic prioritisation of critical trade lanes over broader regional patrols. Ultimately, coastal states would successfully establish a de facto toll system unless met with sustained, multilateral naval coalitions willing to absorb high escalatory risks.

Share your assessment in the comments below.

To read in details click here