Saudi Arabia is not-at-all pleased with the current and prospective state of affairs regarding the Persian Gulf.
From House of Saud, June 20:
Iran's post-waiver "insurance fee" invokes UNCLOS Art.26(2) — the only legal basis for charging vessels in its territorial sea. Saudi exposure: $2B/year.
LONDON — Iran charged nothing for the first sixty days of Hormuz corridor transit, and eighteen of twenty vessels used the route on Day One — which was the point. The “insurance fee” Tehran plans to impose when the free window closes around mid-August is not a toll in softer language but a precise legal construction: an invocation of UNCLOS Article 26(2), the only provision in international maritime law that permits a coastal state to charge vessels during innocent passage, applied to a 5-nautical-mile corridor that Iran designed to ensure innocent passage — rather than the unchargeable transit passage regime through international waters — is the only available option.
The distinction is geographic before it is legal. The standard Hormuz Traffic Separation Scheme runs through international waters under UNCLOS Article 38, where fees are categorically prohibited — Article 44 bars strait states from “hampering” transit, and tolls are conspicuously absent from the permissible regulations in Article 42. Iran’s Larak-Qeshm corridor routes vessels inside its 12-nautical-mile territorial sea, switching the governing legal regime from transit passage to innocent passage, which carries a narrow exception for charges linked to “specific services rendered.” The entire architecture of the post-waiver fee rests on that five-nautical-mile shift, and Saudi Arabia — facing approximately $5.5 million per day in exposure at full throughput — has the least political room of any Gulf state to challenge it, because a formal challenge would grant the corridor the legal standing it currently lacks.
Table of Contents
- Five Nautical Miles Inside Iran’s Territorial Sea
- What Does UNCLOS Article 26 Actually Permit?
- The Insurance Label and the Article 26 Fit
- Why Can No Court or Institution Block This?
- How Did Ninety Percent of Vessels Comply Before a Fee Was Charged?
- The Treaty Iran Cites but Never Ratified
- Can Saudi Arabia Challenge the Fee Without Legitimizing the Corridor?
- What Iran Built While the Fee Was Free
- Frequently Asked Questions
Five Nautical Miles Inside Iran’s Territorial Sea
The Strait of Hormuz has operated under the UNCLOS transit passage regime — Article 38 — since the convention codified the rules for international straits in 1982. Under transit passage, ships and aircraft enjoy the right of continuous, expeditious movement through straits used for international navigation, and Article 44 places an explicit obligation on bordering states: they “shall not hamper transit passage.” Article 42 lists the regulations that strait states may lawfully impose — safety of navigation, pollution prevention, customs enforcement at loading and unloading points — and the omission of fees from that list, as the Dubai-based maritime law firm Hadef Partners noted in their May 2026 analysis via Lexology, “is deliberate.”....
....MUCH MORE
One possible solution that I have not seen discussed anywhere else, is to demand the toll be payable in TrumpCoin and only TrumpCoin.
And then, prior to the toll being imposed do an airdrop (distribution) of TrumpCoin to the Arab shippers.
Also at House of Saud and reflecting the Saudi zeitgeist:
Kuwait Ships First — at Saudi Arabia’s Cost
Qatar PM Arrives for Iran Nuclear Talks That Exclude Saudi Arabia
