Iran Establishes Persian Gulf Strait Authority to Toll Hormuz Transit

Following a conflict with U.S. and Israeli forces that began on February 28, 2026, Iran established the Persian Gulf Strait Authority (PGSA) to assert sovereign control over the Strait of Hormuz. The PGSA implements a multi-tiered transit system requiring vessels to submit detailed operational data—including ownership and crew manifests—to obtain permits. While Tehran characterizes the associated charges as fees for navigational and environmental services, the U.S. government and Gulf states denounce them as illegal tolls.

Reports indicate some vessels have paid up to $2 million per transit in Chinese yuan or Bitcoin. The PGSA's claimed regulatory zone extends 8,800 square miles, encroaching on the territorial waters of Oman and the United Arab Emirates. In response, the U.S. Treasury Department sanctioned the PGSA, warning that any payments to the agency may trigger sanctions. Five Gulf states have urged the International Maritime Organization to ignore Iranian demands.

Parallel to these administrative measures, the Islamic Revolutionary Guard Corps (IRGC) maintains physical control of the waterway, designating specific safe routes and threatening to target non-compliant ships. This instability, compounded by a U.S. naval blockade of Iranian ports, has disrupted approximately 20% of global oil and LNG supplies. Despite sanctions, hundreds of non-Iranian vessels have applied for PGSA permits to resume oil flows. Diplomatic efforts mediated by Pakistan continue, though the U.S. maintains that a permanent tolling system is a non-negotiable barrier to a peace deal.