Iran tightens control over Strait of Hormuz despite ceasefire

Even after the ceasefire with the US, Iran is tightening its control over the Strait of Hormuz, one of the world’s most critical energy routes.

According to a report by The Wall Street Journal, Iran has told mediators it plans to sharply limit ship movements through the strait, allowing only around a dozen vessels a day. Before the conflict, more than 100 ships would pass through daily.

Ships that are allowed through must now coordinate directly with the Islamic Revolutionary Guard Corps, Iran’s powerful paramilitary force. They are also being asked to pay transit fees, with reports suggesting payments are being made in Chinese yuan or cryptocurrency.

Data from S&P Global Market Intelligence showed that just four ships were allowed to pass on one recent day, highlighting how sharply traffic has fallen.

A NEW SOURCE OF LEVERAGE

Iran appears to be using control of the strait as a strategic tool. During the conflict, it asserted control by targeting ships that tried to pass without permission. Now, that control is being formalised under the ceasefire arrangement.

The Strait of Hormuz handles roughly 20 million barrels of oil a day, accounting for about 20% of global supply. Any disruption here has a direct impact on global energy markets, including prices.

Experts say this gives Iran significant influence. “Control is a must,” said Danny Citrinowicz, a former Israeli defence intelligence official, noting that the strait has become as important as Iran’s missile and nuclear capabilities.

HOW THE SYSTEM IS CHANGING

Shipping operators say Iran is already setting up a tiered system.

Ships linked to Iran may pass freely, while those from friendly countries could be charged lower fees. Vessels linked to the US or its allies could face restrictions or denial of passage altogether.

Fees are reportedly being set in advance and can go up to USD 2 million for large oil tankers. These charges may include transit, security and administrative costs.

Iran has also gone a step further and approved a broader plan to manage the strait, which includes charging fees and keeping military oversight in place, according to its state media.

GLOBAL CONCERNS RISING

This has started to worry a lot of countries that depend on the strait, especially in the Gulf, as well as energy buyers across Europe and Asia.

One of the key concerns is legal. Many officials argue that charging tolls in a natural waterway like this goes against international maritime rules, which are meant to ensure free movement of ships.

The US has continued to push for open access, but Iran doesn’t seem to be backing down. In some cases, ships have even been warned over radio that they could be targeted if they try to pass without permission.

UNCERTAINTY CONTINUES

For now, shipping companies remain cautious. Many are holding back from sending vessels through the strait until there is more clarity on how the ceasefire will be implemented.

The uncertainty is already affecting global markets. The Strait of Hormuz is not just vital for oil, but also for liquefied natural gas, fertilisers and key industrial materials.

Even with a ceasefire in place, control over this narrow stretch of water is quickly emerging as one of the biggest pressure points in the conflict. –Money Control