Tehran offers preferential terms to Beijing on new Strait of Hormuz service fees, risking Western backlash as transit rules expire.
Iran plans to introduce nationality-based fee structures for vessels transiting the Strait of Hormuz, granting China and other allied nations discounted terms. The move follows the expiration of a 60-day free-transit window under a temporary US-Iran agreement, with no replacement deal yet finalized. Tehran frames the fees as compensation for security, supervision, and environmental costs, not a toll, but the policy risks reigniting tensions with Washington and Gulf Arab states, which oppose any charges on the critical waterway.
The initial US-Iran agreement allowed unrestricted passage for two months, but shippers remain cautious, with some vessels turned back in recent weeks. European nations may accept a fee structure, potentially splitting Western positions. The uncertainty has already sustained a risk premium in tanker rates despite softer oil prices, as market participants weigh the geopolitical fallout of Iran’s proposed terms.
Iran’s envoy to China confirmed the special arrangements would be developed in coordination with Oman, citing national security concerns post-conflict. The policy could further strain negotiations over permanent post-war transit rules, with broader implications for global energy flows and shipping costs.