Islamic Revolutionary Guard Corps do not present themselves as a toll collector. They present themselves as guarantors of safe conduct, charging vessels transiting the corridor between Qeshm and Larak islands for the security they claim to provide in waters they claim to control. Large crude carriers reportedly face charges approaching two million US dollars per passage, with IRGC demanding settlement in cryptocurrency to circumvent the sanctions architecture that governs Iran's conventional financial interactions. Tehran frames this as remuneration for a service, a charge for guaranteed passage through a waterway where Iranian forces claim exclusive capacity to maintain order. The United States Navy has responded by threatening to treat compliance as a hostile act, leaving global shipping operators trapped between two sovereign commands. What began as a regional confrontation has rapidly become a direct assault on the international law of navigation.
The governing legal framework is principally Part III of the United Nations Convention on the Law of the Sea. Although Iran has not ratified UNCLOS, its straits provisions, Articles 37 through 44, constitute customary international law binding on all states. These articles establish the right of transit passage: all ships enjoy the right of continuous and expeditious navigation through straits used for international navigation connecting one area of high seas or exclusive economic zone to another. Article 26 reinforces this, providing that no charge may be levied on foreign vessels by reason of their transit through territorial sea alone; dues are permissible only where they correspond to specific services actually rendered to the vessel. IRGC charges satisfy neither condition. They are assessed not for any identifiable service but for the act of passage itself, which in precise legal terms converts a navigational right into a commercial licence.
The distinction Iran implicitly contests is one that international law has settled across multiple regimes and over several decades. Suez and Panama canals are sovereign infrastructure constructed under treaty frameworks, the 1888 Constantinople Convention and the 1977 Torrijos-Carter Treaties respectively, that expressly authorise transit dues as service charges for man-made facilities. Natural straits occupy an entirely different legal category, a point the International Court of Justice confirmed in the 1949 Corfu Channel case, where Albania's attempt to condition warship passage through its territorial waters was held unlawful.
International rivers present a related but distinct regime: the Rhine and Danube operate under multilateral treaties permitting service-linked dues but not passage charges, with the Danube governed by the 1948 Belgrade Convention. Archipelagic states such as Indonesia and the Philippines must under UNCLOS Part IV designate sea lanes permitting unimpeded transit without levy. Turkish Straits, governed by the 1936 Montreux Convention, permit Turkey to collect lighthouse and sanitary dues but explicitly prohibit passage fees.
Russia's Northern Sea Route is perhaps the closest live analogue: Moscow levies compulsory icebreaker escort fees on Arctic transits, clothing what critics argue is a functional toll in the language of mandatory safety services. The international legal community remains divided on the Russian position, but even Moscow maintains the formal pretence that vessels are paying for a specific service rather than for passage itself. Iran has not troubled itself with that pretence.
What UNCLOS affirmatively permits a strait coastal state to do is narrow and precisely defined. It may designate sea lanes and traffic separation schemes, subject to adoption through International Maritime Organisation. It may enforce internationally recognised standards on safety and pollution prevention, and it retains limited enforcement jurisdiction under Article 233 against technical violations. What it may not do is exploit geographic position to extract financial consideration for transit itself. IRGC regime fails every test: the designated corridor carries no IMO sanction, documentation requirements exceed any recognised safety basis, and the cryptocurrency payment mechanism is not a feature of legitimate service billing but a deliberate evasion of the financial accountability structures that legitimate charges require.
IRGC presents its corridor as a service. International law reads it as a seizure. The right of transit passage is not a concession the coastal state extends from geographic advantage; it is a right vested in the international community by customary law, confirmed in the Corfu Channel, codified in UNCLOS, and paralleled imperfectly, controversially, but never as brazenly, in every comparable waterway dispute from the Bosphorus to the Bering Strait.
Iran cannot charge for the exercise of a right it has no power to grant, and the cryptocurrency invoices travelling between IRGC officials and tanker operators do not alter that legal reality by a single article. The toll booth is not a novel geopolitical instrument. It is an old claim that international law has refused, in every maritime theatre where it has been seriously advanced.
The author is an international criminal lawyer and director of research at New Delhi based think tank Centre for Integrated and Holistic Studies (CIHS).
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