“The security of the strait will be established with strength, authority and grandeur by the Islamic Republic of Iran, and countries must pay a tax in return.” — Iranian MP Somayeh Rafiei, March 19, 2026
On March 19, 2026, Iranian lawmaker Somayeh Rafiei announced that Iran’s parliament was pursuing legislation to impose tolls and taxes on ships transiting the Strait of Hormuz. Former First Vice President Mohammed Mokhber amplified the vision: Iran would move from “being under sanctions to a powerful position” by defining a “new regime” for the Strait. Parliament Speaker Mohammad Bagher Ghalibaf had already declared on March 16 that maritime traffic “will not return to its pre-war status.”
The message is clear — Iran intends to use the war’s conclusion as an opportunity to recast itself from passive neighbour to active tollkeeper of the world’s most critical oil chokepoint. The legal framework governing international straits has a precise response to that ambition. It is called UNCLOS — and it almost certainly makes Iran’s toll plan illegal. Almost.
⚖️ What UNCLOS Says — and Why It Matters
The United Nations Convention on the Law of the Sea (UNCLOS) is the foundational legal framework governing the world’s oceans — often called “the constitution of the oceans.” It was negotiated over nine years, signed on December 10, 1982, in Montego Bay, Jamaica, and entered into force on November 16, 1994. As of 2026, 168 states are parties to UNCLOS — including India (ratified 1995), China, the EU member states, and Japan.
Two significant non-parties share the same formal status:
- The United States — signed but never ratified UNCLOS due to domestic political opposition to deep seabed mining provisions. Despite this, the US treats most UNCLOS navigation provisions as customary international law and enforces them accordingly.
- Iran — also signed but never ratified UNCLOS. This non-ratification status is central to Iran’s legal argument for the toll proposal.
UNCLOS Part III (Articles 34–45) establishes the legal regime governing straits used for international navigation. The key right at stake in the Hormuz toll debate is transit passage, established in Article 38.
Iran signed UNCLOS but did not ratify it — placing it in the same formal position as the US. “Member state,” “signatory,” and “ratifying state” are legally distinct. Exams test this distinction. Iran is not an UNCLOS member state — it is a signatory that never completed ratification.
📜 Article 38: The Right of Transit Passage — and Why Tolls Violate It
Article 38(1) of UNCLOS states that in straits used for international navigation, “all ships and aircraft enjoy the right of transit passage, which shall not be impeded.”
Article 37 defines the applicable straits as those “used for international navigation between one area of the high seas or an exclusive economic zone and another area of the high seas or an exclusive economic zone.” The Strait of Hormuz fits precisely — it connects the Persian Gulf with the Gulf of Oman and the Arabian Sea.
Transit passage is a specific legal concept with precise content — and it differs critically from the broader right of innocent passage (which applies in territorial seas):
- Transit passage cannot be suspended — not temporarily, not by the bordering state, not even in wartime
- It applies to all ships — military vessels, commercial tankers, fishing boats, and submarines
- It applies to aircraft flying over the strait
- It cannot be conditioned on prior notification or authorisation
Article 44 states the corresponding duties of bordering states: they “shall not hamper transit passage and shall give appropriate publicity to any danger to navigation.” Nowhere in Article 44 — or anywhere in UNCLOS — is there any provision permitting bordering states to charge fees for transit passage.
The fee prohibition follows from the structure of the right itself. Transit passage is a right of free passage. A right subject to a fee is not a right — it is a conditional licence. Charging a fee would transform Hormuz from an international waterway (where passage is a right) to a domestic waterway (where passage is a privilege Iran can grant or withhold). This is precisely the transformation Iran seeks — and precisely what UNCLOS prohibits.
| Feature | Transit Passage (Art. 38) | Innocent Passage (Territorial Sea) |
|---|---|---|
| Applicable zone | International straits | Territorial sea (12 nm) |
| Can be suspended? | No — never, not even in wartime | Yes — bordering state can suspend |
| Applies to submarines? | Yes — may remain submerged | No — must surface and show flag |
| Applies to aircraft? | Yes | No |
| Prior notice required? | No | Sometimes (varies by state) |
| Fees permitted? | No | No — but conditions can be imposed |
These are two distinct UNCLOS rights with different content. Transit passage (Article 38) applies to international straits and cannot be suspended under any circumstances. Innocent passage applies to territorial seas and can be suspended by the bordering state. MCQs frequently conflate them. The Strait of Hormuz is governed by transit passage — not innocent passage.
Article 37 — defines straits used for international navigation. Article 38 — right of transit passage (“shall not be impeded”). Article 44 — duties of bordering states (cannot hamper transit). Article 44 restricts Iran — it does not give Iran rights.
⚖️ Iran’s Legal Counterargument — and Its Weaknesses
Iran has a formal legal counterargument: since it has not ratified UNCLOS, the treaty’s specific provisions do not bind it as a matter of treaty law. States are generally bound only by treaties they have ratified — and Iran never ratified UNCLOS. This argument has technical validity.
However, it faces two fundamental weaknesses:
Weakness 1 — Customary International Law. Many UNCLOS provisions — particularly those governing navigational rights in international straits — are considered to reflect customary international law rather than purely treaty law. Customary international law develops through the consistent practice of states accompanied by a belief that the practice is legally required (opinio juris). The right of transit passage through international straits predates UNCLOS by centuries. If transit passage is customary international law — which most international law scholars hold — it binds all states regardless of UNCLOS ratification status. Iran would find very few international law scholars willing to argue otherwise.
Weakness 2 — Practical enforceability. Even with a defensible legal argument, the practical consequences of charging Hormuz tolls would be severe. Every major maritime power — the US, EU, Japan, South Korea, China, India — has a direct economic stake in refusing to accept Hormuz toll legality. Any Iranian attempt to seize or fine non-paying vessels would constitute an act of piracy under international law and would likely trigger a far more severe military response than the current conflict. The toll proposal is a powerful signalling device — but its practical enforceability is minimal.
Think of the Strait of Hormuz as a public highway that runs through two countries — Iran and Oman. International law says everyone has the right to use that highway for free. Iran is now saying it wants to put up a toll booth. The law says it cannot — and even if Iran tries, the entire world has good reason to refuse to pay, because accepting would mean accepting that Iran controls who gets through.
Iran can be bound by customary international law even without ratifying UNCLOS. Customary international law is derived from consistent state practice and opinio juris — the belief that the practice is legally required. It binds all states regardless of treaty ratification. Exams test whether students know this distinction: Iran can argue it is not bound by UNCLOS as a treaty, but it cannot escape customary international law.
🌍 The “New Regime” Concept: What Iran Is Actually Building
The broader strategic vision articulated by former VP Mokhber — a “new regime for the Strait of Hormuz” — is more significant than the specific toll proposal. Iran is signalling that it intends to use the war’s conclusion to renegotiate its relationship with the strait entirely.
What a “new regime” would likely look like in practice: Iran using its position as a bordering state to discriminate between vessels — as it has already been doing during the war, permitting “friendly” nations’ tankers while blocking others. A formalised version could involve requiring prior notice and approval for all Hormuz transits (which UNCLOS prohibits but Iran would argue does not bind it).
Mokhber’s framing made the logic explicit: “By using the strategic position of the Strait of Hormuz, we can sanction them and not allow their ships to pass through this waterway.” This is not merely a toll system — it is a counter-sanctions system, using Hormuz access as the retaliatory instrument.
The duality reveals what Iran is actually building: a geopolitical sorting mechanism embedded in the world’s most important shipping chokepoint. Countries that do not sanction Iran get access (paying tolls or informal fees). Countries that sanction Iran get blocked. The toll is the price of access for the former; the blockade is the punishment for the latter.
UNCLOS was built on the assumption that states would generally comply with international law governing navigation. But what enforcement mechanism exists when a state with strategic control over a critical chokepoint simply refuses? Iran’s toll proposal exposes a deeper question: is freedom of navigation in international straits a right — or a norm that requires constant power to enforce?
🇮🇳 What This Means for India: The UNCLOS Dilemma
India’s relationship with any future Hormuz toll regime is deeply ambivalent — caught between two competing pressures.
The pragmatic pressure: India received a Hormuz exemption during the current crisis — the “India is our friend” framework that allowed Indian-flagged LPG tankers through while Western ships were blocked. If a formalised post-war Hormuz access regime distinguishes between friendly and hostile nations, India would likely land in the “friendly” category — paying tolls, but paying them. That is far preferable to being blocked entirely when 40 percent of crude oil and 90 percent of LPG transits through Hormuz.
The legal pressure: India cannot formally accept the legality of Hormuz tolls without undermining its own position as an advocate for freedom of navigation. India has ratified UNCLOS (1995) and regularly invokes its provisions in disputes with China over South China Sea access. Accepting Iran’s Hormuz toll regime — even implicitly, by paying — would weaken India’s legal arguments in every other maritime law context.
The likely MEA position: pay whatever informal arrangements Tehran requires for passage (framed as “security fees” or “port dues” rather than “tolls”), without formally accepting the legal framework, and simultaneously continue to invoke UNCLOS in all other maritime law contexts. This is India’s strategic autonomy doctrine applied to maritime law — navigate the practical reality without conceding the legal principle.
India’s Hormuz dilemma is a microcosm of a broader challenge for middle powers in a world where great-power competition is reshaping international institutions. When a state selectively enforces international law — invoking UNCLOS against China in the South China Sea while quietly accommodating Iran’s Hormuz toll — does it strengthen or erode the rules-based international order? Can strategic autonomy be maintained without hypocrisy?
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UNCLOS was signed on December 10, 1982, in Montego Bay, Jamaica — after nine years of negotiation. It entered into force on November 16, 1994. The signing location is a frequent MCQ trap — it was Jamaica, not New York or Geneva.
Article 38 establishes the right of transit passage through international straits, stating that all ships and aircraft enjoy this right, which shall not be impeded. Article 37 defines the applicable straits; Article 44 establishes bordering state duties.
Transit passage cannot be suspended under any circumstances — not temporarily, not by the bordering state, and not even in wartime. Innocent passage (which applies to territorial seas) can be suspended by the bordering state. This is the key distinction tested in exams.
Iran signed UNCLOS but never ratified it — placing it in the same formal position as the United States. Iran is not a member state of UNCLOS. Signed-but-not-ratified means the treaty does not bind Iran as a matter of treaty law, though customary international law may still apply.
Customary international law is derived from two elements: consistent state practice (what states actually do) and opinio juris (the belief that the practice is legally required). It binds all states regardless of treaty ratification — which is why Iran cannot fully escape transit passage obligations even without ratifying UNCLOS.
