Background: how did we get here?
To understand why a single damaged cargo ship made global headlines this week, you need the full arc of this conflict. On 28 February 2026, Israel and the United States launched coordinated strikes against Iran aiming to induce regime change and dismantle its nuclear and ballistic missile programme. Iran responded by weaponising the one piece of geography that gives it outsized global leverage: the Strait of Hormuz. The Strait is one of the world’s most strategically significant waterways — about 50 km wide at its entrance, narrowing to roughly 33 km at its tightest point, bordered by Iran to the north and Oman and the UAE to the south — through which around one-fifth of global oil and LNG supplies normally travel, representing hundreds of billions of dollars in annual energy trade and roughly one-third of international fertiliser trade. Trading EconomicsAl Jazeera
On 18 April, Iran formally closed the Strait in response to a US naval blockade, and over the following weeks at least a dozen vessels were struck by drones, gunfire, mines, or rocket-propelled grenades — including Indian-flagged ships fired on despite having received prior clearance to pass. A ceasefire was reached on 7–8 April after more than five weeks of fighting, and on 17 June, a memorandum of understanding (MOU) was signed by the US and Iranian presidents, intended to formally end the conflict within 60 days. TRADING ECONOMICSWorldbank
What just happened — the fee dispute and the new strike
This is the part most people missed because the ceasefire made headlines while the unresolved details didn’t. According to the MOU, Iran agreed to provide safe passage to commercial shipping “with no charge” for 60 days while demining was undertaken — but the protocol left the longer-term management of the Strait unresolved, requiring Iran and Oman to “conduct dialogue” on its future administration. CNBC
Iran wasted little time signalling its intentions. In March, Iranian officials said they would begin charging ships to use the waterway, and by May, Iran had established the Persian Gulf Strait Authority, a government agency to manage what it called “safe passage permits.” Iran’s foreign ministry has stated it is “not seeking to levy transit tolls; however, fees will be charged in exchange for the services that are provided” — a distinction the US has flatly rejected. Secretary of State Marco Rubio, visiting Gulf allies in Bahrain and Kuwait this week, again rejected the idea of Iran charging vessels to transit the Strait, while President Trump told reporters the Strait would be “permanently toll-free” upon reopening. Al Jazeera + 2
Then, on Thursday, the dispute turned physical again. Iran’s Islamic Revolutionary Guard Corps (IRGC) had warned ships that they must coordinate with its navy and use only its designated route — issued hours after Oman announced a new UN-backed shipping corridor along its own coastline without consulting Tehran. A vessel — later identified as the Ever Lovely, a Singapore-flagged ship owned by Taiwan’s Evergreen Marine, which had been stuck in the Gulf for more than 100 days — was struck by what a US official described as a drone strike while following the new Oman-coast route, damaging its bridge but causing no injuries. In response, the International Maritime Organization (IMO) halted its operation to escort hundreds of stranded ships out of the Persian Gulf, leaving more than 11,000 seafarers stranded in the region, unable to leave for fear of being attacked. Wikipedia + 2
Why this is a legal grey zone, not a settled question
The legal dimension here is genuinely contested, which is part of why this keeps resurfacing. Under the 1982 UN Convention on the Law of the Sea (UNCLOS), the doctrine of “transit passage” applies to international straits connecting two areas of high seas — meaning the Strait should legally remain open to all international shipping without charge. As University of Geneva law professor Robert Kolb put it, “fees would be incompatible with transit passage through a strait… the legal issue has therefore not been conclusively settled.” CNBC
James R. Holmes, chair of maritime strategy at the US Naval War College, was blunter still, noting that unlike man-made canals such as the Panama or Suez Canal which require active management to justify a toll, “as best I can tell the only service Iran would be charging for is not attacking shipping,” adding there is “no provision in international law for a coastal state charging for passage through a natural waterway.” A Brookings Institution report estimated a potential Iranian toll at roughly $1 per barrel of oil, or around $2 million per transit, warning this could become a direct revenue source for the IRGC and set a precedent for other global chokepoints such as the Strait of Malacca, the Strait of Gibraltar, and the Danish Straits. Al JazeeraAl Jazeera
The market data behind the headlines
The economic stakes are not abstract. About 20 million barrels of oil and petroleum products transited the Strait each day in 2025 — used not only by Iran but by Iraq, Kuwait, Qatar, Saudi Arabia, and the UAE. At the height of the closure, this represented roughly 20% of global seaborne oil trade frozen in place. Even now, with the MOU technically in force, a June 8 Brookings report described traffic through the Strait as “near-standstill, except for a small number of vessels that have paid a ‘toll’ to the IRGC in exchange for safe passage” — meaning the de facto toll regime the US insists doesn’t exist may already be operating quietly on the ground. Al Jazeera + 2
The geopolitical undertone
There’s a deeper strategic dimension worth flagging. Brookings analysts separately warned of Iran’s “reported preference for ships from allies, such as Russia and China, or those with ties to Iran, such as India and Pakistan” — meaning that “once access becomes politically conditioned, states can use it to pressure adversaries, reward partners, generate economic rents, and strengthen politically aligned commercial networks.” This is a textbook example of what risk analysts call weaponised interdependence — using control over a critical chokepoint not just for direct revenue, but as a tool of broader geopolitical leverage. Al Jazeera
Farzan Sabet, a researcher at the Geneva Graduate Institute, suggested Iran may want to retain the toll threat “as a card… to play again” if nuclear negotiations stall or the US reimposes sanctions — describing it as “more of a face-saving measure… than a concrete outcome from the war.” CNBC
What to watch next
Three things will determine whether this becomes a durable crisis or a footnote: whether the 60-day no-charge window (running from the 17 June signing) holds without further strikes; whether Oman and Iran can agree on a joint “administration” framework for the Strait that doesn’t function as a toll in practice; and whether the US Navy’s 27 June announcement of a widened route near Oman — a direct challenge to Iran’s claimed control over the waterway — provokes further escalation or quietly succeeds. Given that global energy markets, fertiliser supply chains, and the inflation and central-bank dynamics covered elsewhere on this blog are all directly downstream of how this resolves, this is a story that deserves to stay on every finance professional’s watchlist well past the 60-day clock.
Visit decode-finance.com for more insightful content.