Iran's parliament is advancing a law that would let Tehran charge foreign vessels transit fees in the Strait of Hormuz and ban ships tied to the US and Israel, formalizing a blockade already underway as drone strikes hit tankers and Gulf allies grow frustrated with Washington's diplomacy.
Iran's parliament is reviewing legislation that would impose transit fees of up to 7% of a vessel's cargo value, with penalties reaching 20% for ships that refuse to pay. The bill would bar vessels linked to the United States, Israel, and other nations Iran considers hostile from passing through the strait unless they compensate Tehran for war-related damages.
A blockade with a legal veneer
The bill, first proposed by Iranian lawmaker Mohammad Reza Rezaei Kouchi on April 19, 2026, would retroactively provide legal cover for a blockade Iran has run since February 2026. Tehran also set up the Persian Gulf Strait Authority on May 5, 2026 to oversee transit through the waterway, which carries roughly a fifth of the world's oil consumption.
Attacks escalate as talks stall
This escalation follows a sharp jump in violence. Drone strikes hit two Abu Dhabi National Oil Company tankers, the Navig8 Messi and the Tarif, on August 14, and by the next day only two vessels were reported passing through the strait, according to Kpler data. The UAE accused Iran of piracy, and US Treasury Secretary Scott Bessent said Washington would unveil a new package of economic sanctions during the week of August 17 targeting entities tied to Iran's Revolutionary Guard Corps.
That standoff traces back to the collapse of a June 2026 memorandum of understanding between Washington and Tehran that was meant to guarantee safe passage in exchange for sanctions relief.
Gulf allies lose confidence
Persian Gulf allies are reportedly growing frustrated with President Donald Trump's ability to manage diplomacy with Iran. Prediction markets now put the odds of the blockade ending by August 31, 2026 at 18.5%, down from 24% a day earlier and 76% a week earlier, while the market for a resolution by December 31, 2026 still shows a 78.2% likelihood.
Energy markets have historically reacted fast to trouble in the strait: the 2019 tanker attacks sent Brent crude up roughly 4% in a single session. Insurers covering vessels in the strait were already raising costs before the ADNOC strikes, and the attacks will almost certainly push war-risk premiums higher still. That leaves shippers exposed to fresh geopolitical risk in the Gulf.
Sources: Crypto Briefing, Crypto Briefing, Crypto Briefing
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