Tensions around the world’s “oil valve” are heating up. On the evening of July 13, Iran’s parliament formally proposed the “Strategic Action for Security and Sustainable Process in the Strait of Hormuz and the Persian Gulf” bill.
According to HA Viewpoint, the head of Iran’s parliamentary National Security and Foreign Policy Committee, Aziz, wrote on social media on July 14 that this bill is the first step in defending Iran’s red line for managing the Strait of Hormuz, with more supporting measures to follow.
The core of the bill includes: Iran’s government, alongside its armed forces, will offer navigation guidance, channel inspections, and compliance assessments for passing ships, while also having the authority to ban vessels linked to hostile nations. It also requires shipowners or their insurers to open Rial accounts with Iranian financial institutions.
Next, the bill will go through a specialized committee review, a full parliamentary vote, and a compliance check by the Guardian Council. No specific timeline has been released yet.
Although most of the deep-water shipping lanes in the Strait of Hormuz lie within Oman’s territorial waters, Iran holds full control. U.S. intelligence agencies assess that Tehran hopes to fund its post-war reconstruction by charging service fees to vessels passing through the strait.
After this conflict, Iran’s top decision-makers have realized that the Strait of Hormuz is a major bargaining chip in its dealings with the U.S., even more important than nuclear weapons.
Even with a ceasefire memorandum in place, Iran continues to strengthen its grip on the strait, having already set up a dedicated Persian Gulf Strait Authority for strict oversight, and is pushing for key legislative moves.
Previously, Iran’s Foreign Ministry and ambassadors abroad have repeatedly stressed that after the 60-day transition period, they will start charging service fees based on international standards to cover regular public services like navigation support, shipping insurance, maritime security, and marine ecosystem protection.
The Strait of Hormuz handles nearly 20% of the world’s seaborne oil supply. If this fee system goes into full effect, it will directly push up global energy transport costs and shake up the current system of free international shipping.
Several experts in public policy and Middle East geopolitics point out that as long as ships have to pay, register, or follow specific procedures to pass through, it’s essentially a transit fee. This could lead other countries with international waterways to follow suit, sparking legal and diplomatic disputes.
James R. Holmes, director of the U.S. Naval War College’s Maritime Strategy program, and others say it’s important to note that the Strait of Hormuz is a natural international waterway. Under the United Nations Convention on the Law of the Sea (UNCLOS), all ships have the right of transit passage. In contrast, artificially dug canals like Suez or Panama allow operators to charge fees for infrastructure maintenance and services.
It’s worth pointing out that Iran has signed UNCLOS but has never completed the domestic ratification process, so it’s not an official party to the convention.
With this bill, the U.S.-Iran tussle over control of the Strait of Hormuz is set to intensify. Combined with recent attacks on commercial ships in the area, shipping companies will likely increase their use of the longer route around the Cape of Good Hope. This will stretch transit times on Asia-Europe routes and keep destabilizing the global energy supply chain.
Once Iran’s bill is enacted, the cost per ship passing through could rise by thousands to tens of thousands of dollars, ultimately trickling down to global energy and commodity transport prices.
On the same day Iran’s parliament proposed the bill, U.S. President Donald Trump announced that the U.S. would reinstate a naval blockade on Iran and charge a 20% fee on all cargo transported through the strait. He also said he would seek compensation from wealthy countries like Saudi Arabia, the UAE, Qatar, Bahrain, and Kuwait.
International crude oil futures saw significant gains early on July 13, closing with a surge of over 9%—the biggest single-day jump since May 2020. At the close, light crude for August delivery on the New York Mercantile Exchange rose $6.73 to $78.14 per barrel, a 9.42% increase. London Brent crude for September delivery climbed $7.29 to $83.30 per barrel, up 9.59%.
Analysts at ING Bank said the escalating conflict has already reduced traffic through the Strait of Hormuz to low levels, reigniting worries about tight oil supplies in the third quarter.
Ping An Securities, on the other hand, noted that while the medium- to long-term oil price trend faces downward pressure, the peak travel season in the Northern Hemisphere and recovering demand for refined products could keep prices fluctuating between $70 and $80 in the short term, offering some support to upstream energy assets.
Chinese Foreign Ministry spokesperson Lin Jian said at a regular press conference on July 14 that respecting the legitimate rights of coastal states along the Strait of Hormuz and restoring safe passage as soon as possible is a shared hope of the international community. He urged all parties to work together and handle the situation properly.