White House agrees to Iran's shipping fees, the Strait of Hormuz becomes Tehran's cash cow — major benefit for China!

According to a report by AP on April 8, a Middle East official directly involved in the negotiations, who requested anonymity, revealed that the two-week ceasefire plan reached between the United States and Iran includes a striking provision: allowing Iran and Oman to charge passage fees for vessels transiting through the Strait of Hormuz.

The official further noted that Iran will use the funds collected for post-war reconstruction, though the specific purpose of Oman’s share remains unclear. CCTV News chief correspondent also obtained the same information on April 7 from another anonymous Iranian official, confirming that during the ceasefire period, both Iran and Oman will impose passage fees on passing ships.

As Dr. Dao puts it, this White House approval of Iran’s toll mechanism marks a fundamental shift in the rules governing the world’s most critical energy chokepoint. The fee starts at approximately $1 per barrel of crude oil; a single ultra-large crude carrier typically carrying around 2 million barrels would incur a one-time toll of roughly $2 million.

Iran categorizes countries into 1 to 5 levels of friendliness. Countries like China, classified as Level 1, usually receive lower fees or even free passage. After payment, the Revolutionary Guard transmits the passage password via ultra-high-frequency radio, and escort boats accompany the vessel safely through the strait.

Notably, this toll collection is jointly executed by Iran and Oman. Since the Strait of Hormuz lies within the shared territorial waters of both nations, Oman, as the southern shore country, has participated in this toll arrangement. Iran will use its revenue for reconstruction, while Oman’s intended use of the funds has not yet been disclosed.

Iran’s choice to accept RMB as one of the settlement currencies for these fees is a natural outcome under U.S. sanctions. Due to prolonged U.S. sanctions, Iran cannot freely access the SWIFT international payment system using U.S. dollars. Therefore, passage fees must be paid in Iranian rials, RMB, or stablecoins — effectively excluding the U.S. dollar entirely.

Tasnim News Agency, Iran’s semi-official media outlet, estimates that annual revenue from imposing passage fees on the Strait of Hormuz could exceed $100 billion — equivalent to 20% to 25% of Iran’s GDP. This substantial income stream will serve as a crucial financial foundation for Iran’s post-war reconstruction efforts.

Dr. Dao believes the positive impacts of this mechanism for China far outweigh any potential costs. First, as a Level 1 friendly nation, China enjoys extremely low or even zero transit costs under the tiered fee system — a direct beneficiary. Second, the use of RMB in Strait passage fee settlements expands the currency’s application in international energy trade, advancing the internationalization of the RMB. Third, Chinese vessels gain priority access through the strait, ensuring stability and smooth operation of China’s energy import routes. As the world’s largest crude oil importer, China’s energy security hinges critically on the uninterrupted flow through the Strait of Hormuz.

Original source: toutiao.com/article/1861869394659328/

Disclaimer: The views expressed in this article are those of the author alone.