The struggle over the Strait of Hormuz is no longer simply a contest between freedom of navigation and closure. It is increasingly about who has the authority to regulate passage, determine permitted routes, and extract economic returns from controlling one of the world’s most consequential maritime arteries. This is far more significant than the brief controversy surrounding Donald Trump’s proposal to impose a 20 per cent fee on cargoes transiting the strait.
The proposal lasted barely a day. Following discussions with Gulf governments, President Trump withdrew it and announced that Washington would instead seek compensation through trade and investment agreements. The instrument changed. The underlying expectation did not. American protection of Gulf commerce, in this view, should generate a measurable economic return for the United States.
At almost the same moment, Iran moved in the opposite direction. Tehran has sought to formalize its own authority over Hormuz, insisting that ships should use routes it approves and asserting the right to determine which vessels may pass. Parliament has considered legislation intended to institutionalize that authority, while Iranian officials increasingly portray control of the strait as a legitimate source of political and economic leverage. The dispute is therefore no longer simply about whether Hormuz will remain open. It is about who keeps it open, on what terms, and for whose benefit.
For nearly eight decades, the United States has underwritten a maritime order that has been unusually open by historical standards. American naval power protected not only US commerce and that of its allies but, indirectly, the trade of neutral states and even strategic competitors. China’s economic rise occurred within this order. It imported energy and raw materials and exported manufactured goods across sea lanes secured disproportionately by the country with which it now competes for global leadership. This created one of the defining paradoxes of post-Cold War maritime order. Washington bore the strategic cost of maintaining the maritime commons, while Beijing became one of its principal commercial beneficiaries.
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Trump’s original proposal offered a direct answer to that paradox: those who benefit should pay. Although the proposed fee has disappeared, its strategic significance remains. It revealed that the provider of maritime security might no longer regard freedom of navigation solely as a global public good but also as a service capable of generating direct returns. The proposal’s rapid withdrawal cannot entirely erase the signal it sent, nor the questions it raised about the future philosophy of American maritime power.
Iran advances a different but parallel claim. Its argument rests not on global naval reach but on geography and coercive capability. Because it occupies the northern shore of the strait and possesses the means to disrupt shipping, Tehran argues that it has a legitimate role in determining the conditions of passage.
The United States and Iran are therefore contesting more than a chokepoint. They are advancing rival claims to maritime authority. Washington’s claim derives from its capacity to provide security. Tehran’s derives from its capacity to grant—or deny—access. Both challenge the traditional understanding of freedom of navigation as a general right rather than a conditional privilege. This points towards what might be termed rent-extracting thalassocracy: a maritime order in which control of the sea serves not merely to protect or interrupt commerce but to capture strategic rents by regulating access to it.
History offers a revealing precedent. In the sixteenth century Portugal lacked the naval resources to dominate every port and every sea lane across the Indian Ocean. Instead, it concentrated power at strategic chokepoints and introduced the cartaz system. Merchant vessels required Portuguese licenses specifying where they could sail, what they could carry, and with whom they could trade. Ships sailing without authorization risked seizure or destruction.
Portugal did not attempt to monopolise commerce. It sought something more durable.
It became the gatekeeper of maritime connectivity. By regulating access to the commercial network rather than owning the commerce itself, Portugal inserted itself into transactions it neither produced nor consumed.
The analogy with Hormuz is necessarily imperfect. The strait is governed by international law, and the International Maritime Organization continues to insist that passage should remain free of tolls and discriminatory restrictions. Yet the deeper strategic logic is becoming familiar. The central question is no longer simply who commands the sea. It is increasingly who governs maritime connectivity. This shift has three important consequences.
First, it blurs the distinction between protection and control. A state that provides maritime security may increasingly claim economic rights over the commerce it protects. A state capable of disrupting navigation may demand compensation for refraining from doing so.
Second, it encourages competing systems of authorized passage. Iran insists on approved routes and selective permissions. The United States blocks vessels linked to Iranian trade while protecting others. The result is not the closure of the strait but the emergence of differentiated access according to political affiliation, legal status, and strategic interest.
Third, it encourages states to reduce their dependence upon vulnerable maritime systems. China is unlikely to accept indefinitely a situation in which either Washington or Tehran determines the conditions under which its Gulf energy reaches Asia. Diversified suppliers, strategic reserves, alternative ports, pipelines, and expanded naval capabilities all become logical responses. Ironically, a contest intended to reinforce American maritime primacy may accelerate China’s transition towards sustained far-seas operations in the Indian Ocean.
The implications extend beyond Hormuz. Alternative ports, pipelines, and overland corridors are expanding. Yet they do not eliminate vulnerability; they merely relocate it. The threat by Iran’s Houthi partners against Bab el-Mandeb demonstrates that maritime connectivity functions as an integrated system. Pressure applied at one chokepoint can simply migrate to another.
The same systemic logic now extends beyond geography. Financial sanctions, trade finance, insurance, classification societies, port access, and commercial regulation increasingly determine whether ships can trade as effectively as naval power determines whether they can sail. Modern maritime competition therefore operates through the entire maritime ecosystem rather than fleets alone.
The broader consequences extend well beyond the Gulf. Greater insecurity around Hormuz does not simply increase the price of Gulf oil; it raises the geopolitical cost of accessing it. Higher insurance premiums, greater shipping risks, longer voyages, larger strategic inventories, and recurring uncertainty all become part of the effective cost of energy. As these costs rise, producers located outside the Gulf acquire a relative competitive advantage. The principal beneficiaries are countries in the Atlantic Basin—including the United States, Canada, Brazil, Guyana, and Norway—whose exports are less exposed to the risks associated with the Gulf’s maritime chokepoints.
Whether this outcome reflects deliberate strategy or the cumulative effect of successive geopolitical crises is open to debate. What is becoming increasingly evident, however, is that repeated disruption in the Gulf, together with the degradation of Russian energy infrastructure, is gradually reshaping the geography of global energy security. The traditional Eurasian energy system is becoming relatively more vulnerable, while the Atlantic Basin is emerging as a more secure and therefore more attractive source of supply. In this sense, maritime insecurity is producing a broader geoeconomic rebalancing that reinforces America’s position as the world’s leading energy exporter.
The larger issue, however, is the precedent. If providing maritime security—or possessing the ability to disrupt it—creates a legitimate claim to economic compensation, similar arguments will eventually appear elsewhere. Russia could seek greater political and economic control over Arctic navigation. China may one day justify a more transactional approach to security in the South China Sea. Other littoral states may advance comparable claims over strategic chokepoints.
Freedom of navigation would not disappear overnight. It would instead erode gradually, replaced by overlapping systems of protection, licensing, sanctions, preferential access, and strategic bargaining. The maritime commons would become a collection of contested geopolitical assets.
Hormuz may therefore become far more than the site of an energy crisis. It may become the laboratory in which the next maritime order is first tested. If so, historians may conclude that the most important question raised by the Hormuz crisis was never whether ships could pass. It was who acquired the authority to determine the conditions under which the world could trade.
