24MAY

EU rejects Trump's Hormuz toll venture

2 min read

14:49UTC

Brussels cited UNCLOS transit rights to dismiss a US-Iran joint venture on strait fees.

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Key takeaway

Europe sees Hormuz tolls as a threat to the entire maritime order, not a single waterway dispute.

The European Union rejected Donald Trump's suggestion of a US-Iran "joint venture" on Hormuz toll collection. Under UNCLOS (United Nations Convention on the Law of the Sea), which applies as customary international law to non-signatories including both Iran and the United States, ships enjoy transit passage that "shall not be impeded" and fees may only be charged for specific services rendered, not by reason of passage alone.

No post-1945 precedent exists for a coastal state imposing mandatory tolls on a natural international strait. Just Security assessed Iran's blanket selective toll as a "clear violation" of international norms. Iran's Islamabad proposal included a fee structure tied to vessel passage, as detailed in the Hormuz traffic event above.

Trump had previously called the toll concept "a beautiful thing." That language sits uncomfortably alongside the US's historical role as guarantor of freedom of navigation. The EU's rejection is a legal rebuke, but it has no operational teeth: Russia and China co-vetoed the UNSC Hormuz reopening resolution 11-2 , blocking the only multilateral enforcement route for free navigation.

If tolls are formalised, the precedent extends far beyond Hormuz. Turkey could apply the same logic to the Bosphorus, Egypt could renegotiate Suez terms, Indonesia and Malaysia could toll the strait of Malacca. The EU's objection is not about Iran alone; it is about preventing the rewrite of a maritime order that underpins European trade.

Deep Analysis

In plain English

Trump suggested that the US and Iran could run a 'joint venture' together to collect fees from ships passing through the Strait of Hormuz. He called the idea 'a beautiful thing'. The EU immediately rejected it. Under international law, countries cannot charge ships simply for passing through international straits. Ships have a right to pass freely. Fees are only allowed for specific services, like a pilot to navigate a difficult channel. Iran charging a blanket toll for permission to pass is, in the view of almost every international law scholar, illegal. The EU's rejection matters because European ships are among those currently stranded or blocked. But the EU has no military means to enforce its legal position in the strait, so the rejection is a principled statement rather than an operational one.

Deep Analysis

Root Causes

The EU's UNCLOS position reflects a genuine institutional commitment to rules-based maritime order that European states depend on for trade flows through multiple global chokepoints.

Trump's willingness to entertain a toll joint venture reflects a transactional approach to international law: rules are useful when they serve US interests and renegotiable when they do not. The US's own freedom-of-navigation programme, which has operated since the 1970s, was built on exactly the principle the Hormuz toll would undermine.

What could happen next?

Precedent
Trump's positive framing of a US-Iran Hormuz toll joint venture, if pursued, would be the first US endorsement of a coastal state transit fee on a natural international strait, directly undermining the freedom-of-navigation doctrine the US has defended militarily for 70 years.
Consequence
The transatlantic split on the Hormuz toll question, US treating it as potentially 'beautiful', EU rejecting it as UNCLOS-incompatible, reduces the coherence of any Western negotiating position and gives Iran leverage to play the two sides against each other.

Source Landscape

This story draws on centre-leaning sources from United States

United States

LeftRight

Primary parallel: The 1956 Suez Crisis produced a similar transatlantic fracture: the US refused to support UK and French military action to retake the canal, forcing a humiliating withdrawal. The current EU-US split on Hormuz tolls is a mirror image, with Europe holding the legal principle and the US entertaining practical arrangements with the adversary.

Counter-parallel: The 1979 Iranian nationalisation of the oil industry (preceded by the 1973 Arab oil embargo) showed that US energy interests can override legal principles when the economic pressure is severe enough. Trump's 'beautiful thing' comment suggests a similar calculus: if a US share of Hormuz toll revenue secures energy flow, legal concerns become negotiable.

The UNCLOS violation is not merely a point of principle. If a Hormuz toll regime were accepted as legitimate, even in a US-Iran 'joint venture' format, it would create a precedent that coastal states can monetise transit passage through any international strait.

The Malacca Strait (handles 30% of global trade), the Bab el-Mandeb (approximately 6m barrels of oil per day), and the Taiwan Strait would all face analogous claims from coastal states. The global shipping industry's War Risks Committee estimates that if every major chokepoint adopted similar toll structures, annual insurance and transit costs for global trade would rise by $200-400 billion.

Trump's 'joint venture' framing also has a US fiscal angle: a shared toll regime with Iran would generate hard-currency revenue for Tehran while simultaneously giving Washington a political claim to managing global shipping infrastructure.

Sources:Just Security

Mentions:Turkey →Bosphorus →Malaysia →Iran →Suez Crisis →Islamabad →Indonesia →Prima →Egypt →Russia →Strait of Hormuz →United Nations →China →United States →Strait of Hormuz Toll System →European Union →UN Convention on the Law of the Sea →Donald Trump →

First Reported In

Update #66 · Islamabad collapses: 10 days to expiry

Just Security· 12 Apr 2026

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Causes and effects

This Event

EU rejects Trump's Hormuz toll venture

The EU rejection exposes a transatlantic split: Trump entertained a toll concept that violates the maritime law framework Europe considers binding.

Led to

Paris drafts the Hormuz passage mission

The EU UNCLOS rejection of Trump's toll joint-venture (ID:2243) established the European legal ground the Paris conference is operationalising.

Occurred 17 Apr 2026

Read story →

Different Perspectives

Lloyd's of London

The Joint War Committee left Hormuz war-risk premiums at $10-14 million per voyage on 25 May, declining to move on Brent's 5% fall. The JWC's protocol requires a UN Security Council resolution or bilateral government certification letter before de-listing, and neither has arrived: a verbal understanding does not satisfy the formal condition the reinsurance market's treaty terms require.

Gulf Arab producers

Saudi Arabia and UAE depend on Hormuz for their own crude exports; Aramco CEO Nasser has warned no oil market recovery arrives until 2027 if the blockade continues past mid-June. Monday's $98.96 Brent settlement shortens nothing for Gulf producers without a signed instrument and a Pentagon mine-clearance timeline that runs up to six months post-ceasefire.

Qatar

Qatar holds $12bn of frozen Iranian assets at the centre of the sequencing dispute but cannot release them without explicit US Treasury authorisation, given the original freeze was a US instrument. As the asset-holding state, Qatar's leverage is real but passive: it is the escrow holder, not the decision-maker, and any resolution requires US Treasury sign-off that Trump has withheld.

Pakistan

With both Prime Minister Sharif and army chief Munir simultaneously in Beijing on 25 May, Pakistan has for the first time consolidated its civilian and military mediation tracks under China's roof. Munir's direct Tehran-to-Beijing flight signals that the security and financial threads of the sequencing problem are now being worked in parallel rather than sequentially.

China

Beijing hosted Pakistan's principal mediators and Iran's China envoy Ghalibaf simultaneously on 25 May while its banking regulator capped new state-bank lending to five sanctioned refiners. China is simultaneously the most credible third-party underwriter of the $12bn sequencing and the state whose institutions face live OFAC secondary-sanctions exposure if the deadlock persists through GL V's expiry.

United States

Trump posted on 24 May that the blockade holds until a deal is certified and signed, ruling out the informal MOU structure both sides had been building. The 'certified, and signed' condition is the first operational bar Trump has attached in 87 days, but it arrived without an executive instrument, maintaining the gap between posted ultimatum and signed US policy.