Iran seeks Hormuz leverage as part of war-end demands

Iran has added a new condition to its demands for ending the war with the United States and Israel, calling for recognition of its sovereignty over the Strait of Hormuz, reports CNN.

An Iranian official this week outlined a list of terms to halt the conflict, with the inclusion of control over the key maritime chokepoint marking a notable shift in Tehran's position.

The strait, through which around a fifth of global oil and liquefied natural gas shipments typically pass, has become a central element of Iran's strategy.

The waterway has long been viewed as one of Iran's most powerful tools, but recent developments suggest Tehran is now seeking to turn that leverage into both a sustained source of revenue and a means of exerting pressure on the global economy, CNN reports.

Although Iran has previously warned it could shut down the strait in the event of an attack, many observers did not expect such threats to materialise or have a significant impact on global trade. However, recent disruptions have highlighted the scale of its influence.

Shipping activity through the route has slowed sharply amid Iranian actions, affecting energy markets and prompting several countries to take urgent steps to secure fuel supplies.

"Iran has been a little taken aback by how successful its (Hormuz) strategy has been – by how cheap and how comparatively easy it is to hold the global economy hostage," said Dina Esfandiary, Middle East lead at Bloomberg Economics.

"One of the lessons learned in the war is that it has discovered this new leverage, and it's likely to use it again in the future. And I think monetising it is part of discovering that it has this leverage."

US officials have raised concerns over the implications of such a strategy. Secretary of State Marco Rubio said one of the immediate challenges after the war could be Iran's attempt to introduce a toll system for vessels passing through the strait, CNN reports.

"Not only is this illegal, it's unacceptable, it's dangerous to the world, and it's important that the world have a plan to confront it," Rubio said following a G7 meeting in France. Foreign ministers from the group also stressed the need to restore safe and toll-free navigation.

Reflecting the growing strategic focus on the strait, Mojtaba Khamenei, in his first reported address as Iran's new supreme leader, said the leverage gained from controlling access to the waterway "must continue to be used."

In earlier negotiations with Washington, Iran had focused on sanctions relief and recognition of its nuclear programme, but had not raised the issue of control over Hormuz.

Recent moves indicate a possible shift in approach. Lawmakers in Iran are considering legislation that would require ships carrying fuel and goods to pay transit fees, while a senior adviser has referred to a potential "new regime for the Strait of Hormuz" following the conflict, CNN reports.

Such a system could allow Tehran to impose restrictions on certain countries and link access to the strait with broader geopolitical considerations.

Legal experts have questioned the validity of such plans. "Imposing transit fees is a violation of the rules of transit passage," said James Kraska, a professor of international maritime law at the US Naval War College.

"The Strait of Hormuz is a strait used for international navigation, with overlapping territorial seas of Iran and Oman… Within these waters, Iranian and Omani law applies," he said.

"However, because it is an international strait, the right of transit passage applies for all states, which permits unimpeded surface, overflight, and submerged transit."

These principles are outlined in the UN Convention on the Law of the Sea (UNCLOS). While neither Iran nor the United States is a signatory, many of its provisions are widely recognised as customary international law, CNN reports.

There are a few historical examples of countries successfully charging transit fees in such waterways. Denmark's imposition of dues in the 19th century was eventually abandoned under international pressure through the Copenhagen Convention of 1857.

Despite legal and political challenges, analysts say Iran is assessing how such a system could operate and the potential financial returns.

Estimates suggest that, under normal conditions, around 20 million barrels of oil pass through the strait daily.

If a fee of around $2 million per tanker were applied, revenues could reach about $600 million per month from oil shipments alone, with higher figures possible when LNG is included, CNN reports.

This would place potential earnings close to those generated by Egypt's Suez Canal, although that waterway is a controlled, artificial route.

Analysts say economic pressures may also be driving the proposal. Esfandiary said Tehran may view transit charges as a way to offset losses caused by sanctions, describing it as a relatively low-cost means of generating income.

Iran has maintained that the strait remains open, but officials have indicated that passage may depend on coordination with Iranian authorities, particularly for vessels deemed non-hostile.

At the same time, there are signs that elements of a controlled transit system may already be emerging.

Some vessels appear to be using routes closer to Iran's coastline, with reports suggesting that certain operators may have made payments for safe passage, CNN reports.

However, no government or shipping company has publicly confirmed paying such fees, and details remain unclear.

Shipping intelligence firm Lloyd's List reported that more than 20 vessels have used what it described as a new corridor in the strait, with at least two ships believed to have paid for access.

Iran's Islamic Revolutionary Guard Corps has also introduced a registration process for approved vessels, while some countries are reportedly engaging with Tehran to secure transit for their tankers.

"This is happening. And I suspect it's going to happen slightly more frequently if we don't see some progress in terms of the negotiations," Richard Meade, editor in chief of Lloyd's List, told CNN. "But as we speak right now, the shipping industry is effectively in paralysis."