Shipping groups warn against Hormuz transit fees, citing precedent risks

Leading international shipping organizations have issued a joint statement expressing strong opposition to the potential imposition of transit fees or service charges in the Strait of Hormuz. Eight associations, including the International Chamber of Shipping (ICS), sent an open letter to UN Secretary-General António Guterres and IMO Secretary-General Arsenio Domínguez on June 3.

The organizations warned that establishing such fees would set a dangerous precedent, potentially leading to similar measures in other straits. This, they argued, could significantly increase consumer costs and fundamentally challenge the principle of free navigation, which is crucial for stable global supply chains, economic stability, and energy security. They emphasized that the ability of merchant ships to navigate international waterways safely, predictably, and without undue hindrance is a cornerstone of global commerce.

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The ability of merchant ships to navigate international waters safely, predictably, and without undue hindrance is the bedrock of robust supply chains, economic stability, and energy security.

The letter stressed that the right of navigation in international straits, as established by the UN Convention on the Law of the Sea (UNCLOS), should not become a subject of political negotiation. The shipping groups expressed their readiness to cooperate with the UN and the IMO to ensure that navigational principles are not compromised.

Reports indicate that Iran, in discussions with Oman regarding the reopening of the Strait of Hormuz, has proposed charging fees based on the value of cargo, suggesting a range of 5-7%. Oman has reportedly proposed a 3% fee. The United States has stated its opposition to any costs associated with navigation through the Strait of Hormuz. The shipping industry's stance highlights concerns about the potential for increased trade friction and uncertainty in global maritime transport.

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If a precedent is set for imposing mandatory transit fees or service charges on passage through the Strait of Hormuz, it will be difficult to prevent similar measures in other straits. This will create uncertainty for international shipping and global trade as a whole.