• Iran's hardline lawmakers propose fines of up to 20% of cargo value for violations of new transit rules in the Strait of Hormuz.
  • The bill formalizes Tehran's control, including permits, cargo disclosure, and designated routes, escalating tensions with the U.S.
  • Negotiations for reopening the strait continue, but any deal may cement Iranian oversight and higher costs for shippers.

A New Escalation in the Gulf

A group of Iranian hardline MPs has introduced a draft bill that would give Tehran sweeping powers over the Strait of Hormuz, including the right to fine or confiscate up to 20% of a vessel's cargo value for violations. The proposal, reported by Fars news agency and covered by Al Jazeera in mid-July 2026, is a direct response to U.S. President Donald Trump's plan to impose a similar 20% "security fee" on Hormuz transits.

The bill would require ships to obtain permits, disclose cargo, and use routes designated by Iran, which also insists on calling the waterway the "Persian Gulf." Revenues from fines and confiscations would fund military and infrastructure projects, according to the draft text.

Legal and Diplomatic Pushback

The International Maritime Organization (IMO) has rejected any unilateral fees on transit passage, calling them a violation of the law of the sea. The UK, Australia, and Brazil have also spoken out against the fees, saying they impede the fundamental right of free navigation. "Charging ships for passing through an international strait has no legal basis," an IMO spokesperson said.

The U.S. proposal, announced by Trump in July, has drawn widespread criticism, but the Iranian bill appears to be a tit-for-tat measure. "This is a dangerous game of brinkmanship that could choke off a vital energy artery," said a shipping analyst at a major maritime consultancy.

The Human and Economic Toll

Since late February, when the crisis escalated, daily transits through Hormuz have at times plummeted to below 10% of normal volumes. Tanker freight rates have soared, with war-risk premiums rising by up to 50%. Oil prices have swung wildly, with Brent crude briefly touching $126 a barrel. Many carriers are rerouting around the Cape of Good Hope, adding 10-20 days to voyages and driving up costs for shippers and ultimately consumers.

"This is hitting every importer and exporter, from Japanese refiners to European retailers," noted a maritime economist. "The longer this drags on, the more permanent the damage to global supply chains."

Fragile Prospects for a Deal

Despite the hardline stance, negotiations are ongoing. As of August 4-5, senior Iranian sources indicated talks with Oman on a plan where Iran would control inbound traffic and have visibility over outbound ships, with exit clearance via Omani waters. U.S. Treasury Secretary Scott Bessent said a deal to reopen the strait with "freedom of movement" could be reached within days.

But any agreement is likely to include some form of Iranian oversight, which could institutionalize the permit system. "Even if we see a reopening, it won't be a return to business as usual," said a former U.S. State Department official. "Expect inspections, delays, and higher costs."

Shipping companies are bracing for a new normal. "We're planning for a future where Hormuz is no longer a free and open chokepoint," said the operations director of a major Gulf-based carrier. "That means diversifying routes and investing in alternative energy sources."

The IMO's legal stance remains firm, but Tehran shows no sign of backing down. As the world watches, the fate of global oil supplies hangs in the balance.

Clarification

This article reflects the situation as of early August 2026. Developments may have occurred since that time.