Iran has taken steps to strengthen its control over the Strait of Hormuz, a strategically vital waterway, by introducing a new mandatory insurance policy for vessels transiting the area. The move follows the recent establishment of the Persian Gulf Strait Authority in May and the creation of a dedicated insurance company for the strait, announced by Mousa Rezaei, head of Iran’s primary insurance regulator, according to Iranian state media. While the insurance is currently free, vessels will be required to register and comply with the scheme as part of broader efforts by Tehran to generate revenue and assert authority over the waterway, which it shares with Oman.

Experts interpret these developments as Iran’s attempt to formalize control over maritime traffic, a shift that could mark the beginning of fees imposed on vessels that have historically moved through the strait without charge or Iranian consent. Shipping analysts warn that this could set a precarious precedent for international shipping, complicating navigation and governance in an already tense region. Richard Meade, editor in chief of Lloyd’s List, described the situation as “uncharted territory,” highlighting the uncertainty surrounding the evolving regulations.

The moves also come amid ongoing negotiations between the United States, Iran, and Gulf nations concerning the management and security framework of the Strait of Hormuz. Last week, the U.S. and Iran signed a memorandum of understanding intended to de-escalate conflict and ensure the strait remains open. The agreement deferred discussions on control and operational oversight to future talks, with regional stakeholders, including Oman, expected to participate.

Maritime historian Salvatore Mercogliano noted that Iran’s enforcement of mandatory insurance appears designed to legitimize the Persian Gulf Strait Authority’s role ahead of these broader negotiations. The current waiver period for the insurance runs for 60 days, corresponding with the initial cease-fire term between Tehran and Washington. Afterward, Iran could require vessels to pay for coverage related to risks, such as attacks or crew detentions, which experts suggest are largely a consequence of Iran’s own military actions against commercial shipping.

Legal experts have raised questions about the new policy’s compliance with international law. While charging fees for services like tugboat assistance or waste disposal can be lawful, imposing tolls on passage through an international strait is generally prohibited. Attempts by Iran to frame the fees as payments for unspecified services have drawn criticism, as maritime law does not recognize such claims as justification for mandatory charges on transit.

The International Maritime Organization (IMO) stated that Iran has not officially submitted the insurance requirement for review and emphasized that coastal states cannot suspend or restrict the right of transit passage through straits. The IMO also noted the absence of a legal basis for mandatory tolls or fees, while acknowledging potential for cooperative mechanisms to manage strait operations.

The new insurance requirement also poses practical risks for shippers. The U.S. Treasury Department sanctioned the Persian Gulf Strait Authority in late May, describing it as part of Iran’s efforts to extort vessels under the guise of state-sponsored terrorism. The Treasury warned that payments to the authority could trigger secondary sanctions, complicating maritime operations for companies seeking to avoid violating U.S. laws.

With numerous sanctions currently imposed on Iran by the United States, Europe, and the United Nations remaining in place, compliance with the new insurance scheme carries significant legal and financial uncertainties. Observers note that this leaves global shipping interests navigating a fraught environment, caught between a legacy of conflict and an indeterminate resolution over the strait’s future governance.