For the past 46 years, Washington treated the Strait of Hormuz as a defensive line to be shored up in the service of unimpeded global commerce.
But US President Donald Trump has frequently wavered on that orthodox position, shaming European and regional allies for not doing more to “secure” it, while simultaneously expanding the US Navy’s footprint there.
Tehran also views the Strait of Hormuz as a key pillar of its defensive strategy, and has begrudgingly accepted the status quo of unimpeded maritime traffic as a necessary cost to sustain the so-called shadow fleet that ferries Iran’s sanctioned oil to buyers in Asia.
Now, for the first time in history, both the US and Iran have a plausible shared interest in reforming the international law that governs maritime transit, the United Nations Convention on the Law of the Sea.
UNCLOS rests on a legal fiction from the Early Modern period, treating both the open ocean and coastal waters near global chokepoints as a pristine, natural commons to which all sailors have the right to transit freely. But a post-Panamax container ship is not a 17th-century Dutch fluyt, and the sea lanes captains navigate today no longer exist as they once did.
Modern straits are perpetually re-engineered through dredging operations, the placement of electronic signals and the removal of wrecks. They’re constantly policed to discourage piracy and to enforce environmental regulations. And they also require a small army of radio operators to provide traffic information and navigational assistance. They are, in other words, a form of infrastructure.
Articles 26 and 44 UNCLOS legally prohibit coastal states from charging tolls for these services to ships in transit, forcing sovereigns to absorb the operational and environmental costs of keeping their straits “free” and navigable.
This functions as a subsidy for logistics capital at the expense of taxpayers in countries like Singapore, Indonesia, Malaysia, Oman, and Iran. Acknowledging how unjust this system is could offer a pragmatic opening in future negotiations for the US and Iran to rethink who should actually pay for “free” transit.
Classical liberal legal traditions treat the ocean as a gift of nature, an ideal that is conceptually moored in the age of sail. When a 17th-century Portuguese nau sailed the Strait of Malacca, it navigated largely “natural” coastal waters, relying on tides, wind, and local knowledge of channel depths for transit.
By contrast, a modern post-Panamax container ship requires a heavily engineered environment to transit without running aground or colliding with other ships, thus immobilizing the global economy.
Facilitating safe passage for these leviathans requires ongoing, capital-intensive dredging operations to maintain navigable channels, the management of complex traffic separation schemes to prevent congestion in crowded waters, and round-the-clock policing operations to deter and prevent the aforementioned threats of piracy and environmental catastrophe.
Even when everything goes according to plan, coastal states are still left to bear the cost of remedying externalities such as air pollution and ballast water contamination.
While UNCLOS Article 43 offers the vague encouragement for “user states” to cooperate with coastal states in establishing what are essentially charity funds, the broader framework prohibits them from levying transit tolls to recover their investments.
In the eyes of international law, passage through these “natural environments” must remain unburdened by transactional fees. This is a rhetorical sleight of hand that renders the production and labor of maintaining global shipping lanes invisible, legally declaring multi-million-dollar sovereign infrastructure projects a gift of nature.
Proponents of the current UNCLOS framework frequently conflate tariffs and tolls to justify the status quo, warning that allowing states to charge for passage would erect artificial barriers to global trade.
But a tariff is an artificial barrier, designed to manipulate market advantages, punish adversaries, and protect domestic industries. A toll, conversely, is a user fee applied to recover the capital that goes into continually reproducing straits as maritime infrastructure.
To prevent crises of overaccumulation, global capitalism requires commodities to move from production to market as quickly and cheaply as possible. This imperative is predicated on the physical destruction of space and time through the invention of larger ships and deeper channels.
UNCLOS serves as the ultimate guarantor of this imperative. By demanding toll-free passage through global chokepoints, regardless of how big ships get, the UN ensures that global capital encounters no financial resistance from the sovereigns it relies on for valorization.
The immense financial benefits of this supposedly “free” transit are extended almost entirely to the destination markets of North America and Europe and to the multinational shipping corporations that command the fleets. Meanwhile, the financial and environmental costs are dumped almost exclusively on the coastal states.
This status quo is unjust to a wide range of nations across the geopolitical spectrum. The US, historically trapped by its self-appointed, Carter Doctrine-era role as the guarantor of “freedom of navigation,” bears the exorbitant naval and military costs of securing sea lanes globally, acting as the security detail for international commerce.
With the petrodollar paradigm slowly unraveling and an economic and political pivot to Latin America all but guaranteed in the coming years, the US has neither the financial wherewithal nor the political incentive to maintain this role in the long term.
Iran, conversely, shoulders the infrastructural and environmental costs mirrored across the globe. Coastal and transit states like Malaysia, Indonesia, Thailand and Singapore are forced to manage an unending parade of post-Panamax vessels along their coastlines, enduring the environmental strain and financial risks inherent to the mega-shipping industry, all while the UNCLOS framework denies them the legal right to upstream compensation.
By acknowledging the true costs of sustaining our modern maritime commons, future ceasefire talks could shift the negotiations over the Strait of Hormuz away from a zero-sum standoff over “freedom of navigation.”
That, in turn, could open the door to a shared, pragmatic conversation about equitable cost-sharing and the mutual economic disadvantages both the US and Iran have historically (and in Iran’s case, begrudgingly) accepted under the current legal regime.
As a tangible policy pivot, the American and Iranian delegations could find unexpected common ground by advocating a coordinated, mutual rejection of UNCLOS as it currently stands.
In its place, Washington and Tehran could champion a new paradigm, replacing the outdated concept of a free commons with a standardized, and internationally regulated “infrastructure toll” system–enforced by local coast guards and navies and payable in local currencies.
Such a framework would guarantee passage and allow coastal states to recoup the costs of maintaining global shipping lanes: funding the existing mandate, capitalizing the maritime industrial sector in coastal states, and encouraging future restraint by the US foreign policy and military apparatus.
Logan McMillen writes foreign policy analysis through the lens of critical political economy and geography, focusing on Latin America. His work has recently appeared in The New Republic, Responsible Statecraft, the North American Congress on Latin America, and Foreign Policy in Focus.