Iran's Strait of Hormuz Toll Proposal Hits Resistance

A 'protection' toll on the Strait of Hormuz is what Iran wants, but it's unlikely to happen. The proposed fee system would generate close to $20 billion annually, which both the US and Iran's Gulf neighbors consider too high.

'Pure extortion' is how former White House energy advisor Bob McNally described Iran's 5% or 7% service fee per barrel of oil proposal. A 5% fee would result in an annual windfall for Iran ranging from $18 billion to $25 billion, triggering global inflationary cost hikes.

Giving Iran authority over the Strait would allow it to escalate tensions at any time, denying access to countries hosting US military bases. However, McNally doesn't think Iran is determined to impose heavy tolls, as they know this won't be accepted.

A more likely outcome is an illusory comparison to the Strait of Malacca's smaller, voluntary fee system for services rendered and maintenance. This could involve GCC members paying 'voluntary' fees to both Iran and Oman for managing the strait, which would not be acknowledged publicly.