Iran Establishes Authority to Tax and Control Strait of Hormuz

Following a military conflict with the United States and Israel that began in February 2026, Iran established the Persian Gulf Strait Authority (PGSA) to formalize its control over the Strait of Hormuz. The PGSA requires vessels to submit a detailed "Vessel Information Declaration" containing over 40 data points, including ownership and cargo, to obtain transit permits. While Tehran officially denies collecting tolls, calling the payments fees for "navigational services" and environmental protection, reports indicate some vessels have paid up to $2 million in Chinese yuan or Bitcoin for passage.

To institutionalize this control, Iran published maps claiming regulatory authority over 8,800 square miles, encroaching into the territorial waters of Oman and the United Arab Emirates. The Islamic Revolutionary Guard Corps (IRGC) manages the physical checkpoints and has warned that ships failing to comply with designated routes are legitimate targets. In response, the United States Department of the Treasury sanctioned the PGSA and prohibited U.S. persons from making payments for safe passage.

U.S. President Donald Trump briefly launched "Project Freedom" to escort commercial ships but paused the operation after the French vessel San Antonio was attacked. The U.S. Navy continues a blockade of Iranian ports, while some tankers now use "dark" tactics—disabling AIS transponders—to evade detection. Despite diplomatic mediation by Pakistan and talks in Beijing with China, the waterway remains a critical pressure point, with the U.S. and Gulf states rejecting the legality of the Iranian fee regime under international maritime law.