Iran Made Hormuz A Toll Plaza Since War

One of the biggest consequences faced by many countries due to the ongoing US – Iran conflict has been the repeated restrictions on the crucial waterway Strait of Hormuz, which handles one fifth of the global commercial freight through its narrow lanes.

This crucial geographical chokepoint has witnessed a major transformation in its operations after the start of the war. In order to control the passage, Iran started charging a toll of roughly $1 per barrel on passing crude oil vessels.

In fact, Iran has effectively turned the natural strait into a tollway that generates substantial national revenue during the crisis.

Usually, open ocean channels like Hormuz, Gibraltar and others operated freely under international law without passage fees, unlike man-made shipping routes such as the Suez Canal. Under this new maritime system, big oil tankers now face charges near $2 million per transit in through Hormuz.

Just like how Iran leveraged the crucial waterway to its advantage only because of the geographical advantage, if other countries also start using the same strategy for all remaining key water channels to benefit financially, it will spike the prices of oil and natural gas across the globe due to ripple effect.

India will bear the brunt of such strategies because we are dependent on Middle East countries for oil and natural gas. The Strait of Hormuz acts as a crucial energy lifeline for India’s growing economy. India imports about 60% of its total cooking gas, and nearly 90% of those shipments travel directly through this narrow corridor.

Already, the war has resulted in acute shortage of cooking gas and fuel and also hiked their prices drastically. If these tolls continue to be imposed at the current rate, it will surely burden families of all categories.