Senior visiting fellow, George Mason University
The idea that Iran could generate tens of billions of dollars annually by charging ships to pass through the Strait of Hormuz has gained traction in media commentary, but the claim does not withstand scrutiny.
Estimates circulating in public debate frequently suggest Iran could earn $40–100 billion annually by imposing transit fees on vessels using the strait, effectively turning the country into a “$100 billion gatekeeper” of global energy flows.
Yet a closer look at shipping volumes, pricing norms and international law suggests the potential revenues would likely be closer to $1–2 billion a year, even under optimistic assumptions.
According to the US Energy Information Administration, nearly 21 million barrels of oil per day passed through the strait in early 2025—around 20% of global petroleum liquids consumption and roughly a quarter of seaborne oil trade. About 20% of global LNG trade, largely from Qatar, also transits the waterway.
With petroleum cargo alone worth more than $500 billion annually, it is easy to see why the toll narrative is appealing.
Simple arithmetic of multiplying a hypothetical transit fee by daily vessel traffic quickly produces headline-grabbing estimates of tens of billions of dollars. But those calculations overlook how maritime transit actually works.
Legal and practical limits
Unlike the Suez Canal, the Strait of Hormuz is a natural waterway, not an engineered passage requiring dredging, infrastructure and navigation services.
The canal charges substantial transit fees partly because it is an artificial route requiring constant maintenance. Those fees typically range from about $200,000 to $700,000 per vessel.
Natural straits such as Hormuz operate under the transit passage regime established by the United Nations Convention on the Law of the Sea, which prohibits charging vessels simply for passage and requires non-discriminatory treatment.
Although Iran has not formally ratified the convention, these principles are widely recognized as customary international law. Oman, which shares jurisdiction over the strait and has ratified the treaty, has shown little willingness to support aggressive tolling policies.
Any unilateral attempt to impose large transit fees would likely trigger legal challenges and opposition from maritime powers and major energy importers.
The math behind the myth
Even ignoring legal constraints, realistic pricing benchmarks produce far smaller revenue estimates.
Applying Suez-style fee levels to Hormuz traffic dramatically reduces the numbers. Pre-conflict flows included roughly 10 very large crude carriers per day, alongside LNG and product tankers.
Using comparable Suez pricing (roughly $535,000 per tanker), and accounting for Oman’s jurisdictional share, Iran’s portion would likely amount to around $1.5 billion annually under ideal conditions.
And even that estimate assumes stable traffic, full compliance and minimal enforcement costs—conditions unlikely to hold if Tehran attempted to impose tariffs unilaterally.
In practice, traffic would likely fall as ships sought alternative routes or bypass pipelines such as Saudi Arabia’s East–West pipeline.
Geopolitical reality
The geopolitical constraints are equally significant.
The Strait of Hormuz is a critical energy lifeline for major economies including China, India, Japan and European states. Countries heavily dependent on Middle East energy supplies would be unlikely to accept large additional costs imposed unilaterally.
History offers a clear precedent. During the 1980s Tanker War, attacks on Persian Gulf shipping triggered international military intervention to secure maritime flows. Similar dynamics would likely emerge if transit fees were imposed on a large scale.
For Iran itself, the economic logic is also questionable. The country already struggles to monetize its oil exports because of sanctions and financial restrictions. Attempting to impose transit tariffs would likely intensify geopolitical pressure and reduce shipping volumes, offsetting much of the potential revenue.
The danger of the narrative
The biggest risk lies not in the policy itself but in the narrative surrounding it.
Inflated revenue estimates exaggerate Iran’s potential leverage over global energy markets. For Tehran, they may encourage overconfidence in the economic value of coercive maritime policies.
For external actors, they risk inflating the perceived threat and encouraging responses based on exaggerated assumptions.
The strategic value of the Strait of Hormuz lies not in its potential as a revenue-generating toll system, but in its role as a stable transit corridor for global energy flows.
The widely cited estimates are not supported by legal precedent, market behavior or geopolitical realities.
The “$100 billion gatekeeper” is not a viable strategy. It is a catchy headline for an economic illusion.
