3 weeks ago

Iran-Oman Hormuz transit fee plan faces industry resistance over sanctions

Iran-Oman Hormuz transit fee plan faces industry resistance over sanctions
Iran’s Hormuz transit fee plan faces industry resistance over sanctions - Telegraph India · telegraphindia.com

The Strait of Hormuz is a narrow strip of water where many ships carrying oil and other goods travel.

Iran and Oman are neighbors who want to make a deal about who controls this waterway.

The deal would let Iran check and control ships coming in and charge them money.

Iran wants to charge ships between 5 and 7 percent of what their cargo is worth.

Oman thinks a smaller fee of about 3 percent is better, while the United States says no fees at all.

Many shipping companies do not like this idea and say charging ships to pass is like a toll.

They say it breaks rules that were set up for ships passing through international waters.

There is another problem: the United States has sanctions on the Iranian authority that runs the waterway, so companies that pay may get into trouble.

Insurance companies also added a rule that stops covering ships that pay such fees.

This puts ship owners in a hard spot, so the deal is very hard to make work.

Key facts

Proposed fee by Iran
Between 5% and 7% of the price of cargoes
Proposed fee by Oman
Around 3%
US position
No fees at all
Sanctioned operator
Persian Gulf Strait Authority, set up by Iran in May
Insurance change
Lloyd's Market Association clause terminating cover for vessels that pay transit fees, introduced late July
Shipping routing system
Two-way traffic separation scheme adopted by the UN shipping agency in 1968
Strait's role
Main route for about a fifth of world oil supplies before the war

Quotes

World shipping associations

Leading global shipping industry groups

“The ability of merchant ships to navigate international waterways 'safely, predictably and without unnecessary impediment is fundamental to resilient supply chains, economic stability and energy security'”
telegraphindia.com
“Under the clause, insurers have no liability to indemnify any such payment and, where such a payment has been made, are discharged from obligations in respect of the relevant vessel”
telegraphindia.com

Sources

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