Iran drafts law to impose tolls for transiting Strait of Hormuz

The Iranian parliament is working on a draft bill to charge a fee in exchange for providing security to ships passing through the Strait of Hormuz, according to the semi-official Fars news agency.The plan is expected to be finalised next week, the agency said, citing an unnamed lawmaker. “We are pursuing a proposal in which Iran’s sovereignty, control, and oversight in the Strait of Hormuz are formally recognised in law, and through the collection of tolls, a source of revenue is also created for the country,” Fars cited the lawmaker as saying.

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Iran’s move to formalise a transit fee for the vital Strait of Hormuz comes as the war in the Middle East approaches the end of its fourth week. The waterway through which a fifth of the world’s oil passes has been all but closed to tanker traffic, with only a trickle of ships, mainly with Chinese and Iranian affiliations, getting through.The disruptions in Hormuz have resulted in forced shutdowns of Persian Gulf oil production, while refineries in the area have also been damaged in the war.

Oil prices have surged as a result, with global benchmark Brent topping $114 a barrel earlier this week, and the Trump administration examining what a potential spike to $200 would mean for the economy.