GLOBAL trade relies heavily on a few critical maritime chokepoints that not only facilitate the movement of goods but also shape direction of international politics.

Among the most prominent are Suez Canal, Panama Canal and Strait of Hormuz. Egypt and Panama have successfully transformed their waterways into major sources of national revenue through structured toll systems. Can Iran similarly use Strait of Hormuz for economic gain and would such strategy be practical and sustainable? Suez and Panama Canals are artificial waterways, constructed through extensive engineering, investment and continuous maintenance. Egypt and Panama possess internationally recognized legal authority to impose transit fees on vessels passing through these canals. Egypt earns billions of dollars annually from Suez Canal alone, while Panama’s economy mainly depends on its canal toll system. Shipping companies willingly pay these fees because the routes significantly reduce travel time and fuel costs, ultimately making them economically beneficial. The success of these systems rests on legal legitimacy, transparency and stable administrative frameworks.

In contrast, the Strait of Hormuz is a genuine maritime passage that no single state has constructed. It connects Persian Gulf to Arabian Sea and ranks among the most vital global energy corridors. A substantial portion of the world’s oil supply passes through this narrow waterway, making it indispensable for international markets. Roughly 140 vessels transit the Strait daily, amounting to nearly 50 thousand ships annually. This volume underscores its extraordinary strategic importance. Despite this, legal and political framework governing Strait of Hormuz is different from that of Suez and Panama Canals.

Under international maritime law, particularly the principle of “transit passage,” coastal states cannot unilaterally impose taxes or tolls on vessels passing through natural straits used for international navigation. This represents the primary obstacle preventing Iran from establishing a formal toll system. While there have been periodic allegations during times of heightened tensions that Iran has attempted to exert pressure on certain vessels for concessions or financial advantage, such actions fall outside the bounds of internationally accepted legal norms. Strait of Hormuz holds enormous revenue potential. If Iran were able to charge $5 hundred thousand per vessel for 50 thousand ships annually, total revenue could reach around $ 25 billion per year. Even a more modest fee of $ one hundred thousand per ship could generate up to $5 billion annually. These figures suggest that Iran could replicate the economic success achieved by Egypt and Panama.

Any unilateral attempt by Iran to impose tolls would likely trigger a strong international backlash. Such a move would not only violate established maritime laws but could also escalate tensions with major global powers. Maritime trade operates on principles of stability and predictability; any disruption or uncertainty in a key shipping route compels companies to explore alternative options, even if those alternatives are more costly. For countries importing oil and gas from Gulf, Strait of Hormuz remains the most critical route. This dependency explains why global powers and Gulf States are investing in alternative infrastructure, including pipelines and port networks, to reduce reliance on the strait. These efforts reflect a long-term strategy to mitigate risks associated with geopolitical instability in the region.

Difference between Strait of Hormuz and Suez and Panama Canals lies in element of trust and stability. The canals operate under clearly defined regulations, robust administrative systems and broad international confidence, ensuring steady and reliable revenue streams. Strait of Hormuz is located in a geopolitically sensitive region where tensions can escalate rapidly. Under such conditions, establishing and maintaining a structured toll system becomes exceedingly difficult. The global economy is gradually transitioning toward alternative energy sources. While oil remains a dominant energy commodity, growing adoption of renewable energy may reduce long-term strategic importance of oil transportation routes. Relying on Strait of Hormuz as a future economic pillar may not represent a secure long-term strategy.

For Iran, turning the Strait of Hormuz into a toll corridor like the Suez or Panama Canal remains largely theoretical rather than practical, as legal constraints, political risks and likely international resistance make such a strategy highly unstable. Sustainable revenue requires legal legitimacy, political stability and global trust—conditions currently absent—meaning even the world’s most strategic waterway cannot ensure consistent income unless there is a major shift in global power or stronger Iranian regional consolidation that reshapes existing precedents. From another perspective, it is also argued that if Iran were to impose tolls, it would not significantly harm the US or Israel, and that US involvement in securing the Strait of Hormuz is questioned on the grounds that many states have not directly supported it, raising broader debates about responsibility and consistency in international law.

—The writer is editor, political analyst and author of several books based in Islamabad.

© Pakistan Observer