WASHINGTON – President Donald Trump’s announcement Monday that the U.S. would charge 20% fees on ships passing through the Strait of Hormuz alarmed experts on maritime law and energy markets, who said the levies would violate international law and cause oil prices to balloon.
The average tanker that transits the strait holds about $172 million worth of crude oil at the closing price Monday evening, so Trump’s plan would cost $34 million per ship.
Ian Ralby, the president of Auxilium Worldwide, an organization that works on maritime governance among other issues, called the fees illegal, unprecedented and harmful.
“What we’re seeing is the president of the United States announcing … a policy that would potentially be the most significant barrier to international trade the United States has ever imposed,” he said.
About 26 hours after announcing the tariffs, Trump abruptly dropped the idea after lobbying from Middle East allies. Instead, he posted on Truth Social, Gulf States have promised to make “MASSIVE” investments in the U.S. – supporting the view that the threat was a negotiating ploy.
“I thought it was good,” he told reporters, but “I was called by different people, different countries, kings and emirs … and they said, `We’d love to do it a different way. … We would like to invest tremendously in the United States as opposed to charging a fee.’”
International law protects the right of free passage in the strait and other international waterways. Commercial shipping through the Strait of Hormuz, which is just 21 miles wide at its narrowest point between Iran and Oman, relies on two lanes that are each 2 miles wide.
Iran closed the strait for the first time in history on Feb. 28 after war broke out with the U.S. and Israel. As a fragile ceasefire crumbled in recent days, Iran declared Sunday that it had closed the strait again.
On Monday, Trump said the U.S. military will reimpose a blockade on Iranian ships.
“All other countries will have fair and open use of the Strait. The U.S.A. will be, from this point forward, known as `THE GUARDIAN OF THE HORMUZ STRAIT,’” he posted on Truth Social, adding that safe passage wouldn’t be free. The 20% toll, he wrote, was “a matter of FAIRNESS” to reimburse the U.S. for “providing safety and security to this very volatile section of the World.”
Iran had cited much the same rationale when it claimed the right to charge tolls up to $2 million per vessel in mid-March.
But Iran, unlike the United States, borders the Persian Gulf and the strait that links it to the Gulf of Oman and the Arabian Sea. Roughly 7.9% of global maritime trade moves through the strait, including one-fifth of the world’s oil and natural gas.
The White House never said how the U.S. would enforce the fees.
Trump’s toll plan represented a complete about-face for his own foreign policy and centuries of American demands for freedom of navigation.
“No country is allowed to charge tolls or fees on an international waterway. That’s existing international law. That’s the way it is in international waterways all over the world, and that’s the way we expect it’ll be here,” Secretary of State Marco Rubio said just three weeks ago.
“POTUS is absolutely right,” Iran’s foreign minister, Seyed Abbas Araghchi, posted on X, mocking the president for hypocrisy. “Whoever provides secure and safe passage of commercial vessels through the Strait of Hormuz should be compensated for this service.”
Economic consequences
Very large crude carriers, the class of ships used in most global crude oil transport, can carry up to 2.2 million barrels of oil, according to the U.S. Energy Information Administration. Prices passed $79 per barrel Monday night – up almost $5.50 in the 10 hours after Trump announced the fees.
Based on pre-war shipping levels, the U.S. would collect about $341 million every day from the fees.
But energy experts say that would never happen, because such high fees would bring shipping through the strait to a halt again.
Ralby said the fee Trump proposed is higher than the typical 5% to 15% profit margins that shippers operate on.
Skip York, an energy and global oil fellow at Rice University’s Baker Institute for Public Policy, agreed that Trump’s proposed fee was exorbitant.
“When we do pay transit fees, they tend to be literally an order of magnitude less than what the president is proposing,” he said.
Because oil is priced on a global market, such fees would drive up prices everywhere, including in regions that don’t buy much Persian Gulf oil. That includes the United States, which got only about 8% of its imported oil from Gulf suppliers in 2025, according to the American Petroleum Institute – which amounts to just 2% of U.S. consumption.
The price at the pump could go up 30 to 40 cents per gallon in the U.S., York said.
He noted that owners of man-made waterways like the Suez Canal in Egypt, which links the Red Sea to the Mediterranean Sea, can legally charge transit fees. But those are typically a tenth the size of what Trump proposed.
The point of freedom of navigation is to hold down costs for maritime shipping, Ralby said. The U.S. tolls would hamper global trade.
“We want ships to be able to move from one part of the world to another with as few impediments as possible,” he said.
Reversal of U.S. policy
The Barbary Wars – the origin of the “shores of Tripoli” line in the Marines’ Hymn – were among America’s earliest attempts to secure the right to trade without having to pay tribute to pirates.
Freedom of navigation “in peace and in war” was so critical that it was No. 2 in President Woodrow Wilson’s Fourteen Points plan to end World War I.
The National Security Strategy published by the White House in November 2025 included “preserving freedom of navigation in all crucial sea lanes” as a U.S. objective.
“This is way outside the scope of anything we’ve seen the U.S. or anyone else ever do,” Ralby said.
Noting how much more modest Iran’s tolls were, he said, “It’s a strange negotiating tactic on the part of the president to make the other party seem like the one that has more business sense or is more credible.”
Rebecca Higgins, the vice president of policy at the Eno Center for Transportation, said the fact that the U.S. doesn’t border the strait makes tolls there even more unjustifiable under international law.
She also said it’s hard to see how the U.S. could implement the tolls without Iran’s cooperation.
“I don’t know how the U.S. would protect the ships in a continued era of war,” she said.
‘No legal basis’
Freedom of navigation in international waters isn’t just U.S. policy. It is guaranteed worldwide by the United Nations Convention on the Law of the Sea.
Higgins said the convention is clear: tolling the Strait of Hormuz is illegal. So did a spokesperson for the International Maritime Organization, the U.N. agency responsible for ocean shipping provisions of UNCLOS. “There is no legal basis through which to introduce mandatory tolls simply to transit through a strait,” the official said.
Neither Iran nor the U.S. has ratified UNCLOS. But Higgins said that doesn’t mean the rules don’t apply to them.
Iran disputes that it is bound by UNCLOS and has consistently asserted sovereignty over the Strait of Hormuz.
President Ronald Reagan rejected UNCLOS in 1982 over seabed mining provisions, though he declared that the U.S. agreed with the freedom of navigation provisions and would abide by those.
That has remained U.S. policy since, making Trump’s proposed tolls a complete outlier.
“This is not a realistic policy decision that’s been vetted through different channels with any kind of seriousness,” Ralby said.
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