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By Andre Pienaar
The Iranian regime published its terms for reopening the Strait of Hormuz today on state media, and they read less like a maritime framework and more like a ransom note.
On Thursday, 06 August, the Islamic Revolutionary Guard Corps (IRGC)-affiliated Fars News Agency released an initial draft plan setting out the conditions under which Iran would permit commercial shipping to resume through the world’s most important energy chokepoint. The draft is strikingly restrictive. American and Israeli vessels would be banned from the strait outright. Ships flagged to other nations that Iran deems to have “harmed” it would be barred until compensation is paid to Tehran. Violators of the regime would face penalties equivalent to 20 per cent of the value of the cargo aboard. Oil prices jumped following publication.
The timing is no accident. President Trump and Secretary Bessent had suggested only a day earlier that an announcement on reopening the strait could come within days. The IRGC’s media arm promptly cast doubt on any immediate reopening, and the Fars draft should be read as a deliberate negotiating gambit by an aggressor: a maximalist opening position published for domestic and international consumption while negotiations continue through Muscat.
From corridor to concession
The draft does not emerge from a vacuum. It builds on, and hardens, a framework that Iran and Oman have been quietly developing for weeks. Under that framework, the existing northern and southern shipping corridors through the strait would eventually be eliminated, with all maritime traffic channelled through a single central route. Iranian officials have pressed for transiting vessels to pay for a bundle of “services” — insurance, refuelling and environmental protection — administered under Iranian oversight.
Iranian state media have dressed this up in the language of international law. Press TV has described the talks as entering “a new phase”, with a new “middle corridor” that would replace the existing routes while ensuring safe navigation and protecting Iran’s rights as a coastal state. Stripped of the diplomatic upholstery, the proposition is simple: Iran seeks to convert a right of transit passage guaranteed under customary international law into a revenue-generating concession administered from Bandar Abbas.
The American-brokered version of the arrangement, as reported in Washington, looks rather different. Under that proposal, inbound ships would use a northern lane through Iranian waters while outbound vessels would transit a southern lane in Omani waters coordinated with Iran, with no transit fees charged for an initial 60-day period. The gap between the two versions — a fee-free, jointly administered corridor on the one hand and a punitive licensing regime on the other — is the true measure of how far apart the parties remain.
The ghost of Article 5
Much of this contest traces back to the memorandum of understanding signed by Iran and the United States on 17 June, under which Iran agreed to allow commercial vessels through the strait without charge for 60 days. The wording of Article 5 was left deliberately vague on the question of who ultimately controls the waterway: a constructive ambiguity that allowed both sides to claim victory at the time and which Tehran is now exploiting to the full.
Iran’s foreign minister has already floated the logic of a “guardianship fee”, remarking pointedly that whoever provides safe passage through the strait deserves compensation and that Iran “has always been the guardian” of the waterway. The 20 per cent penalty figure in the Fars draft is the same number that surfaced in that earlier rhetorical exchange, now formalised in draft text. What began as a taunt has become a term sheet.
Iran widens its maritime war
The Hormuz negotiations are not proceeding in isolation. Iran’s Houthi allies in Yemen have extended the conflict to the Bab al-Mandeb Strait at the mouth of the Red Sea, claiming attacks this week on a Saudi tanker off the Yanbu export terminal and on Saudi positions in Yemen. Yanbu matters. It has been the principal valve through which Riyadh has diverted millions of barrels of oil away from the closed Gulf route. A vessel has already been sunk in the Bab al-Mandeb, and another tanker reported explosions off the Omani coast while transiting Hormuz this week.
The pattern is coherent. Tehran and its proxies are working to demonstrate that there is no safe alternative to a Hormuz reopened on Iranian terms; that every workaround, from the Cape of Good Hope to the Red Sea pipelines, can be made expensive, slow or dangerous. It is chokepoint diplomacy conducted on a grand scale, and it is why record volumes of shipping have been rounding the Cape for months.
What the West should take from this
Three conclusions follow. First, the Fars draft is a negotiating instrument, not a final position, but negotiating instruments reveal intent, and the aggressor’s intent here is to institutionalise Iranian leverage over global energy flows long after the shooting stops. A “middle corridor” administered by Iran, complete with fees, licences and a compensation regime, would represent the most significant revision of the maritime order in the Gulf since the Tanker War of the 1980s.
Second, this would set a dangerous precedent that matters well beyond the Gulf. If transit through an international strait can be conditioned on political compensation and cargo-value penalties, every coastal state astride a chokepoint, from the Bab al-Mandeb to the approaches to the Taiwan Strait, will be taking note. The principle of transit passage and freedom of navigation is indivisible; it is either defended everywhere or eroded everywhere.
Third, the West’s response cannot be purely naval. Maritime security is now energy security. The past six months have demonstrated that resilience — alternative routes, strategic stockpiles, strengthened insurance markets and investment in the security of the Cape route, which now carries most of the diverted traffic — is what converts Iranian leverage into an Iranian bluff. Escorts can reopen a strait; resilience and redundancy diminish its value.
Tehran has published its price list. The task for the United States and its allies is to ensure that the market never has to pay it. That would mean rewarding an aggressor that has ruthlessly massacred thousands of its own young people and has been responsible for a global campaign of terrorism spanning decades.
André Pienaar is the founder and chief executive of C5 Capital, a specialist investment firm focused on national security. Pienaar is also the executive chairman of Collective Defence, a C5 portfolio company focused on protecting critical infrastructure around the world.
