Full Breakdown
Iran Launches Persian Gulf Strait Authority to Regulate Hormuz Transits
5/18/2026, 10:29:02 PM
Formalizing Hormuz Transit Control
On 18 May 2026 Iran’s Supreme National Security Council announced the Persian Gulf Strait Authority (PGSA), a body that will issue permits and collect fees for vessels transiting the Strait of Hormuz. The authority, presented on its X account as the “legal entity … for managing the passage and transit,” works under the IRGC Navy, which controls the waterway. The move follows a U.S.–Israel strike campaign that closed the strait on 28 February and prompted a naval blockade on 13 April.
Permit System, Fees, and Revenue Claims
Vessels must email ownership, insurance, crew manifest, cargo and routing details; a permit follows fee payment. No official tariff is published, but reports cite up to US $2 million per transit, sometimes in Chinese yuan. Iran projects $70-90 billion annual revenue, while metro billboards claim $100 billion potential. The PGSA also offers a “Hormuz Safe” insurance covering cargo from confirmation, payable in cryptocurrency.
Iranian Official Narrative
Iran calls the PGSA a transparent, safety-focused mechanism. Ebrahim Azizi said it “offers specialized services in exchange for a fee” and will benefit only vessels that cooperate. First Vice President Mohammad Reza Aref warned that Iran “will not permit the passage of military equipment intended against us again.” Foreign Ministry spokesman Esmail Baghaei said talks with the United States continue via Pakistani mediation and a 14-point plan is under discussion.
Legal and Industry Pushback
UNCLOS grants a transit-passage right that bars unilateral tolls. Iran has signed but not ratified the convention; the U.S., EU and Gulf states deem the fee regime illegal. Maritime security firms note the permit process requires extensive disclosures and many shipowners remain reluctant, echoing “they’ll believe it when they see it.” Experts warn Iran lacks reinsurance capacity and that cryptocurrency payments raise sanctions-avoidance concerns.
Conflicting Reports and Gaps
Some sources cite a $2 million fee per vessel; others say no official tariff exists. Payments are reported in Chinese yuan or Bitcoin. Revenue estimates range from $70-90 billion to $100 billion, without independent verification. The legal status of PGSA permits under international law remains unsettled.
Verbatim Quotes
- “We had given up our right of sovereignty over the Strait of Hormuz, and we previously allowed the passage of military equipment that was intended to be used against us through the Strait of Hormuz. We will not permit that again,” — Mohammad Reza Aref, First Vice President
- “Passage without permission will be considered illegal,” — Persian Gulf Strait Authority (PGSA) X account
- “The shipowners I’ve spoken to have said they’ll believe it when they see it,” — Halvor Ellefsen, director, Fearnleys Shipbrokers UK Ltd.
- “Insurance depends on trust, enforceability, and internationally recognised legal standards,” — Abdul Khalique, head, Liverpool John Moores University Maritime Centre
Outlook
Pakistan’s prime minister has relayed a revised Iranian proposal to Washington, and Tehran says U.S. oil sanctions could be lifted during talks. The United States, China and the United Nations continue to reject any tolls. PGSA’s chance to restore traffic depends on negotiation outcomes, acceptance of its insurance scheme, and the wider U.S.–Iran conflict.
