The argument that tolls can be charged in the Strait of Hormuz because the Suez and Panama canals charge fees is based on a false equivalence. The two categories are governed by completely different legal regimes.
Legal Status: Artificial Waterway vs International Strait
The Suez Canal and Panama Canal are artificial waterways. They are internal waters of Egypt and Panama respectively, constructed and maintained at national expense. Transit through them is subject to national sovereignty and governed by specific conventions like the Constantinople Convention of 1888 for Suez and the Torrijos-Carter Treaties for Panama. Fees there are levied as canal dues for the service and infrastructure provided.
The Strait of Hormuz is a natural “strait used for international navigation” under Part III of the United Nations Convention on the Law of the Sea, or UNCLOS. It connects two parts of the high seas and is subject to the regime of transit passage. Coastal states exercise sovereignty over their territorial sea, but that sovereignty is qualified by the right of transit passage for all ships and aircraft.
The Prohibition on Passage-Only Charges
UNCLOS Article 38 establishes the right of transit passage, and bordering states “shall not hamper transit passage.” Article 26 makes it explicit: “No charge may be levied upon foreign ships by reason only of their passage through the territorial sea.” Charges are permitted only for “specific services rendered to the ship,” such as pilotage or towage, and must be applied on a non-discriminatory basis. A blanket toll per transit or per barrel is not a service charge. It is a duty on innocent passage, which the Convention bars.
The Precedent Risk
The UN’s International Maritime Organization has already warned that a toll on Hormuz would “set a dangerous precedent” because there is no treaty basis for monetizing transit through international straits. If the principle is conceded here, it can be invoked for the Strait of Malacca, Bab el-Mandeb, the Danish Straits, or the Dover Strait. That would fragment the customary regime of freedom of navigation into a patchwork of national tolling zones.
Canal dues compensate a state for an artificial shortcut it built and operates. A toll on Hormuz would tax a right that already exists under international law. UNCLOS draws a clear line between the two. Conflating them undermines the legal order that keeps global shipping lanes open.
Marex Media