The IRGC's toll system on the strait of Hormuz is operational. Ships pass through a 5-mile channel between Larak and Qeshm islands — inside Iranian territorial waters — where IRGC personnel hail them on VHF radio, verify transponder data, and negotiate passage fees reaching $2 million per vessel1. Payment is accepted in cash, cryptocurrency, or barter2. Approximately 90 vessels transited with IRGC clearance in the first two weeks of March3.
The system is a strategic adaptation. Iran's initial total blockade of Hormuz — through which roughly 20% of global oil transits daily — proved unsustainable under American air superiority. CENTCOM has destroyed 140 vessels; A-10 Warthogs and Apache helicopters hunt fast-attack craft at low altitude along the southern Iranian littoral. Rather than maintain a naval confrontation it was losing, Tehran shifted to selective access. Foreign Minister Araghchi stated the strait is 'closed only to ships belonging to our enemies'. The toll system is how that policy operates in practice.
The geography makes enforcement straightforward. The navigable channel at its narrowest runs through waters Iran has controlled since Britain withdrew from The Gulf in 1971. During the 1980–88 war with Iraq, Iran mined these same waters — a precedent the Defence Council cited on Sunday when it threatened to mine 'all access routes' if Iranian coasts or islands are attacked. But mining denies passage. The toll system monetises it. Revenue flows to the same IRGC provincial commands that patrol the strait, creating a self-financing enforcement loop: the chokepoint funds its own enforcers.
The result is a two-tier global shipping system. India, Pakistan, Iraq, Malaysia, and China are negotiating bilateral transit arrangements with Tehran; Japan secured passage on 21 March. Nations aligned with the US face an effective embargo. With charter rates at $800,000 per day, more than 3,000 vessels stranded across the Middle East, and rerouting around the Cape of Good Hope adding weeks and millions per voyage, the IRGC's toll is a calculable cost of doing business. Brent Crude peaked at $126 per barrel four days ago. Iran has found a way to make the Hormuz Chokepoint not just militarily sustainable but profitable.
