Inside Iran’s $2 Million Crypto Toll at the Strait of Hormuz

Environmental Protection Rationale

A separate pillar of Iran’s defense rests on environmental grounds. Arman Khorsand, a senior official at Iran’s Department of Environment, argued that charging ships for ecological risks has a clear basis in international maritime law. He framed the fees as compensation for unavoidable environmental damage inflicted on the Persian Gulf by heavy maritime traffic .

Sovereignty Within Territorial Waters

Iran also points to UNCLOS provisions that allow a coastal state to regulate passage within its territorial sea, up to 12 nautical miles from the coast, as long as it permits “innocent passage” . Because the Strait of Hormuz is narrow, with shipping lanes passing through both Iranian and Omani territorial waters, Tehran argues it has jurisdiction.

However, this interpretation is widely rejected. Jaume Saura, a professor of international law at the University of Barcelona, categorizes the fee regime as “modern piracy contrary to international law,” unequivocally stating that no toll may be levied solely for the act of transit, and freedom of navigation cannot be impaired . The GCC and international shipping bodies have similarly condemned the measures as illegal .

The Persian Gulf Strait Authority and a Crypto-Based Toll System

Iran moved quickly to institutionalize its de facto control. In May 2026, it formally established the Persian Gulf Strait Authority (PGSA) to approve transit and collect payments . Lloyd’s List, a shipping intelligence journal, reported that the authority introduced a new framework requiring ships to obtain transit authorization and pay tolls before sailing, with operators submitting detailed records of ownership, insurance, crew, cargo, and routing .

The Toll Structure

• Fee: Approximately $1 per barrel of crude oil cargo .
• Cost per VLCC: A Very Large Crude Carrier carrying 2 million barrels faces a fee of up to $2 million per passage .
• Exemptions: Empty vessels can pass free of charge .
• Estimated Revenue: Based on pre-crisis traffic levels, the scheme could generate an estimated $600–800 million per month once fully operational .

Crypto Payments: Circumventing the Dollar

In a historic first, a nation-state is levying transit fees at a critical maritime chokepoint using cryptocurrency. Payments are accepted exclusively in Bitcoin, USDT (a stablecoin), or Chinese yuan . The system is administered through an intermediary linked to the Islamic Revolutionary Guard Corps (IRGC).

Blockchain analytics firms Chainalysis and TRM Labs have independently documented the operational scheme, making it the first known instance of a state requiring crypto payments for passage through a strategic waterway. This approach allows Iran to bypass Western sanctions by avoiding the U.S. dollar entirely, creating a binary compliance choice for shipping companies: pay and face U.S. sanctions, or refuse and risk detention .

The U.S. Response: Sanctions, Warnings, and Military Pressure

Washington’s response has been multi-layered and aggressive.

Presidential Red Line: President Donald Trump declared the U.S. would not permit Iran to impose tolls, warning on his Truth Social platform, “They better not be and, if they are, they better stop now!” He emphasized the strait’s status as an international waterway under international law .

Financial Deterrent: The U.S. Office of Foreign Assets Control (OFAC) quickly issued a formal alert warning global shipping companies that making any payment to Iran for safe passage could trigger U.S. sanctions . Treasury Secretary Scott Bessent amplified the threat, calling the PGSA “a joke” and vowing the Treasury would “aggressively” target anyone facilitating the tolls .

Military Escalation: The United States launched an aerial campaign against Iranian targets along the strait, established a naval blockade of Iran, and began escort operations to protect vessels that refuse to pay the fee . The military posture remains a central component of U.S. policy, aimed at enforcing freedom of navigation by force if necessary.

Global Fallout: Energy Crisis, Divided Allies, and a Dangerous Precedent

Commercial Shipping Collapse

The combined effect of military strikes and the toll regime has been devastating. Shipping traffic through the Strait of Hormuz has been “largely blocked” since late February 2026 . Reports indicate it has fallen to less than 4 percent of normal levels, essentially shutting down the primary artery for roughly one-fifth of the world’s oil and liquefied natural gas supply .

A Global Fuel Crisis

The effective closure has triggered a worldwide energy shock. Oil and LNG prices have spiked sharply as alternative supply routes—already strained—cannot compensate for the lost Hormuz volume. The global fuel crisis has become a defining economic feature of the broader U.S.-Iran conflict .

Oman’s Impossible Position

Oman, which shares sovereignty over the strait with Iran, is caught in an excruciating diplomatic squeeze. Iran’s ambassador to France confirmed Tehran and Muscat are discussing a permanent joint toll system, a vision that would give Oman a financial stake in the arrangement .

But the pressure from Washington is intense. Treasury Secretary Bessent said Oman’s ambassador personally assured him the sultanate had “no plans to introduce a toll” . Yet on June 4, 2026, Oman publicly rejected U.S. demands to sever engagement with Iran, insisting its discussions with Tehran comply with international law and would only proceed after consultation with the International Maritime Organization . The Omani monarchy, historically a neutral mediator, now faces a stark choice between a lucrative windfall and a potentially catastrophic breach with its Western allies .

De-Dollarization and the Future of Trade

By forcing payment in yuan and crypto, Iran is executing a deliberate strategy to undermine the dollar’s dominance in global energy markets. The PGSA toll system provides a template for sanctions evasion, proving that a state can monetize a strategic chokepoint while bypassing the U.S.-led financial system .

A Threat to International Maritime Law

Legal and geopolitical analysts warn that if Iran’s toll regime survives, it could set a dangerous precedent. Other coastal states could follow suit, unilaterally monetizing strategic chokepoints like the Malacca Strait or the Bab el-Mandeb. This would systematically dismantle the UNCLOS framework of free transit passage that has underpinned global trade for decades, replacing legal predictability with a patchwork of coercive fee systems .