Hormuz toll booth would be ‘unacceptable’ to Gulf producers

• GCC unlikely to accept Iranian control
• Slim chance of Iran-Oman agreement
• Many options ‘still on the table’

A diplomatic toll-booth arrangement in the Strait of Hormuz – which carried about a fifth of global oil before Iran effectively blocked it in response to US-Israeli attacks – would be unacceptable to Gulf producers, a senior analyst said.

Amena Bakr, head of Middle East and Opec+ insights at maritime intelligence firm Kpler, said GCC countries would reject any such deal.

“I don’t think it’s going to be accepted by any of the Gulf states here to have a toll system whereby vessels pay,” she told an industry panel.

The island of Larak, close to a particularly narrow stretch of the strait, has become one of the most sensitive points in the waterway. Vessels have been rerouting north of the island through a so-called “Tehran toll booth” approved by Iran.

Dozens of ships have used the northern corridor since March 13, according to tracking data, with Lloyd’s List reporting that operators had paid up to $2 million for safe passage.

Bakr, an AGBI columnist, told a webinar hosted by Kpler: “What is the toll going to be based on? Is it on flag, on cargo? There are lots of questions.”

She said Gulf states wanted any eventual settlement to restore the free flow of oil from all countries in the region and would not accept an outcome that left Iran in control of the waterway.

“The position is very clear from the GCC side,” she said. “They will not accept Iran controlling the flow.”

“This is a passage that should be open to all and should not be paid for. This is not like the Suez Canal. It’s a completely different situation.”

Unlike the Suez Canal – a purpose-built waterway operated by Egypt that charges fees – the Strait of Hormuz is an international passageway where ships have a legal right to transit without payment.

Last week, Iran said it was drafting a protocol with Muscat to monitor traffic through the strait. Oman has not publicly confirmed any such arrangement or explained how passage is being agreed.

Since then, a handful of ships have transited south through the strait under tightly controlled conditions with passage so far limited to vessels without clear US or Israeli links. 

These include three Omani-operated tankers, a French-owned container ship and a Japanese-linked gas tanker.

A tanker carrying Iraqi crude also made its way through the strait on Sunday, Bloomberg reported, after Iran said it would grant an exemption to “brotherly Iraq”.

Michelle Brouhard, Kpler’s head of policy and geopolitical risk, said there was an unlikely scenario in which Iran and Oman could agree on a transit mechanism as part of a ceasefire settlement.

“I know that sounds like a stretch, but if Iran and Oman can come to a solution and create some sort of legitimised toll booth, and you can get some sort of structure where ships can come through the strait, it would give Iran money for reparations through the toll booth,” she said.

That, she added, “could lead to a ceasefire”, although she put the chances of such an outcome at about 15 percent.

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Iran shut the narrow sea lane after US and Israeli strikes at the end of February widened into a broader conflict. As a result, crude prices surged to a four-year high of almost $120 a barrel last month. 

Bakr said Gulf producers were seeking to project calm and continuity in oil policy despite the crisis, while exploring longer-term contingency options.

“Opec is very keen on delivering stable policy,” she said. “We are seeing and hearing of other options being explored, building more pipelines, more contingency plans and expanding existing pipelines that bypass the strait. All of these options are still on the table.”