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Iran Conflict 2026
25MAY

Hormuz tolls paid in yuan, $2m a ship

4 min read
13:55UTC

Lloyd's List confirmed vessels have paid up to $2 million per ship in Chinese yuan to obtain Persian Gulf Strait Authority transit clearance, the first confirmed payments routing outside the dollar correspondent-banking system OFAC's enforcement architecture relies on.

ConflictDeveloping
Key takeaway

A yuan toll booth at Hormuz collects revenue in a currency OFAC's screening architecture cannot automatically catch.

Lloyd's List confirmed on 7 May that vessels have paid up to $2 million per ship to obtain Persian Gulf Strait Authority (PGSA) transit clearance, with payments settled in Chinese yuan 1. Iran has not published a tariff schedule, and the PGSA registration channel that opened on 6 May still shows zero formal sign-ups from the 2,000-vessel stranded fleet. The toll route is operating in parallel without a public registry: vessels pay quietly, then transit.

The architecture matters more than the figure. OFAC, the US sanctions enforcement office, runs almost entirely on the dollar. A SWIFT message routed through a US correspondent bank trips a screening obligation under executive orders 13902 and 13224, the legal spine of the 1 May Sanctions Bulletin (SB0483) issued alongside General Licence W . The screening fires automatically; the bank has to act or face penalties. A yuan-denominated payment routes around all of it, with no SWIFT trail through New York, no US correspondent bank on the chain, and no automatic OFAC tripwire.

The legal foundation Iran is invoking is the Majlis Hormuz sovereignty law ratified on 2 May and the PGSA structure created on 5 May. Together they convert a maritime chokepoint into a domestic-law toll booth, and the yuan denomination is the architectural choice that lets Iran's PGSA collect outside the dollar system.

The template is a 2022 import. Russian crude buyers settled in yuan through Chinese correspondent banks after the 2022 SWIFT exclusions, exactly to escape the dollar-clearing leg that OFAC sanctions hook into. Iran has now extended that template from commodity sales to maritime access fees, the first known instance of a sanctioned state using yuan-denominated transit revenue at scale. SB0483 was a warning framing rather than a new prohibition; the vessels paying in yuan face secondary-sanctions risk under existing executive orders, but enforcement against a yuan transaction with no US nexus requires OFAC to designate the specific vessel or shipper rather than rely on the automatic correspondent-bank step. That is a measurably slower, more political enforcement path.

A signed MOU would unwind the PGSA collection inside a month. That ties the precedent's durability to the 9 May reply window: every day the toll collects in yuan is a day the dollar enforcement architecture falls one notch shorter, and a day the yuan-routing template hardens into a usable model for the next sanctioned state to copy.

Deep Analysis

In plain English

Ships passing through the Strait of Hormuz are being charged up to $2 million each to get through, paid in Chinese yuan rather than US dollars. That currency choice is deliberate: the US sanctions enforcement system works by monitoring dollar payments through American banks. Pay in yuan through Chinese banks, and that monitoring system cannot automatically catch it. Iran has essentially found a payment route that the US cannot block the way it normally would. A signed peace deal would end the toll system; until then, the toll keeps collecting.

Deep Analysis
Root Causes

OFAC's Iran sanctions architecture was designed for a dollar-centric global financial system in which every significant cross-border payment eventually routes through a US correspondent bank. The 2022 Russian SWIFT exclusion was the proof-of-concept that demonstrated dollar-clearing avoidance at scale.

The IRGC's finance operation observed the Russian crude routing model for three years before the 2026 conflict opened. Iran chose yuan to exploit the same structural gap: sanctions enforcement requires a US-nexus transaction in the payment chain, and a yuan toll settled through Chinese correspondent banks provides none.

What could happen next?
  • Precedent

    The yuan-denominated PGSA toll is the first confirmed instance of a sanctioned state using yuan-denominated transit revenue at scale; if it persists, it becomes the model for any future sanctioned chokepoint controller.

    Long term · 0.8
  • Risk

    OFAC's only available response, individually designating each vessel or operator, is measurably slower than the automatic correspondent-bank tripwire, creating a window in which the toll collects with near-impunity.

    Immediate · 0.85
  • Opportunity

    A signed MOU would unwind the PGSA collection within the 30-day Hormuz reopening timeline, extinguishing the yuan-routing precedent before it fully hardens into a copyable model.

    Short term · 0.65
First Reported In

Update #91 · MOU in Tehran, missiles in the strait

AGBI· 8 May 2026
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Different Perspectives
Lloyd's of London
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
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
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
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
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
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.