“Some reconcilement of remotest mind,

Leaves [H]ormuz rubyless, and Ophir chill.”

Hart Crane (1899–1932)

With the United States waging an illegal war against Iran to reshape the architecture of the Middle East, the architecture of the Hormuz Strait may now be reshaped, moving toward its own “Malacca Moment”: a shift toward cooperative arrangements between strait and user states to finance safe navigation.

From the medieval customs collected by the rulers of Hormuz to the Portuguese cartaz system after 1515, successive powers sought to regulate maritime traffic through mechanisms that combined commercial, strategic, and security objectives. Yet, as Iran’s MFA spokesman recently put it, the Strait of Hormuz remained open “from the time of Adam” up until the US/Israeli aggression in February 2026.

Those historical practices arose under fundamentally different legal orders. Yet they reveal a persistent logic: the Strait of Hormuz has always been more than a trading corridor, and at critical moments in Iran’s long history, one of its greatest wartime advantages. In fact, war and existential security threats shifted the balance, prompting Tehran to move from de facto wartime semi-closure toward a regulated maritime control regime, including an alternative northern shipping route under Iranian coordination.

Iran’s response brought the legality of charging vessels into the debate. Reports also indicate that the Iranian Parliament is considering fees for transiting vessels as part of a broader governance plan. UNCLOS seems straightforward. Simply referring to Article 26, coastal States may not levy charges on foreign ships merely by reason of passage through their territorial sea. However, payments only for “specific services” are permitted. However, the boundary between the two paragraphs is not fully clear.

Much of the legal debate has therefore centered on a single question: can Iran, alone or jointly with Oman, lawfully impose charges in one of the world’s most important international straits? Yet this framing overlooks a more fundamental and neglected question within the UNCLOS regime: who should bear the costs of maintaining safe navigation and other maritime services in strategically important international straits? Hormuz may now bring that question to the fore, offering an opportunity to reconsider the underused framework of UNCLOS Article 43.

Rhetoric is shifting, and recent diplomatic developments between Iran and Oman point to a possible joint framework for re-managing navigation through Hormuz. The two States have cooperated since the 1970s, including through the IMO-approved Traffic Separation Scheme (TSS), under which the principal shipping routes lie predominantly within Omani territorial waters. While the future legal regime remained uncertain, a broader question has emerged: who should pay for what, and on what basis? This post argues that the Strait may become Article 43’s practical test.

Beyond Transit Tolls: Who Pays for Safe Navigation?

Much of the legal debate over the Strait of Hormuz rests on a questionable assumption: Iran seeks to charge vessels simply for transiting the Strait. If that is the case, however, the legal analysis would be straightforward. Article 26, read together with the transit passage regime in Part III of UNCLOS, prohibits coastal States from impeding free passage by any means.

Although our analysis focuses only on maritime finance, the applicable legal regime for passage through the Strait of Hormuz remains relevant. Iran has lived outside UNCLOS for almost four decades, continuing to reject the customary status of the transit passage regime. (see: Iran’s Legal Strategy in Hormuz). It has accordingly been argued (here) that a dual legal regime governs the Strait of Hormuz: transit passage through Oman’s territorial waters in the southern corridor and a non-suspendable innocent passage as reflected in customary law (see: Tanaka at 107 and Churchill, Lowe & Sander at 165), through Iran’s territorial waters in the northern corridor.

Even if relabeled under other names, a unilateral toll system that seriously or primarily conditions passage would be legally problematic. However, that might not be the case. What if the fees are levied only as service charges? Whether that characterization is ultimately persuasive is less important here than the legal distinction it raises: when does a payment relate to passage itself, and when does it finance identifiable services associated with navigation?

The diplomatic discourse following the 2026 aggression presents a more nuanced picture. Rather than referring to “tolls”, Iranian official statements increasingly use careful terminology, describing it as “compensation for maritime services.” These statements suggest that Iran views maritime traffic as having long operated based on “comity” and “mutual good faith”. Given the fundamental changes in circumstances and the security environment, however, this accommodation is no longer sustainable. Hence, absent a customary right of transit passage, Iran maintains the right to regulate passage, levy service charges, require prior authorization for warships, and take necessary measures to safeguard Hormuz’s security.

The conceptual distinction matters because safe navigation depends on a range of costly services and aids provided by strait States, while UNCLOS offers limited guidance on how to finance them. Article 26(b) leaves the scope of permissible service charges less clear. The more underused capacity, however, lies elsewhere, in the broader architecture of Part III, particularly its final provisions on transit passage.

Articles 41 and 42 recognize the role of strait States in regulating navigation and maintaining safety as a ground. Regulating navigation and exercising jurisdiction and sovereignty, in accordance with applicable law, is the prerogative of the strait States. Still, it is Article 43 that complements this framework by providing for cooperation between “user States and States bordering a strait” in the “establishment and maintenance” of “necessary navigational and safety aids” and other improvements for international navigation, as well as measures to “prevent, reduce and control pollution” from ships.

The premise of Article 43 is simple: international navigation benefits the global community so its costs should not fall solely on strait States. The goal is also to ensure that user States’ interests are taken into account and to provide a cooperative mechanism for contributing expertise and resources. (Oxman at 416) Article 43 is therefore not a one-way mechanism for advancing the interests of user States; rather, it establishes a two-sided bargain in which the participation and contributions of user States match the responsibilities strait States bear in maintaining safe navigation. If the services are a shared concern, why should the financial burden necessarily fall exclusively on one side?

Article 43: A Missed Provision?

The travaux préparatoires suggest that Article 43 was deliberately not intended as a self-contained financing regime, but as a legal framework for cooperation, leaving the precise institutional and financial arrangements to subsequent agreement. Its reference to cooperation “by agreement” has therefore been argued to make cooperation the governing mode of implementation, rather than merely permitting it. (see Oxman at 413-4)

Originating in a UK proposal and developed with the Straits of Malacca particularly in mind (see Nandan & Anderson at 193), Article 43 was deliberately distinguished from Article 26. While Article 26 permits charges for specific services under the innocent passage regime, no equivalent provision exists in the transit passage regime. This appears deliberate, especially given that proposals to impose charges were not accepted during the negotiations (Ibid at 194). This does not, however, mean that UNCLOS prohibits any fees for specific services rendered in straits forming part of the territorial sea, such as Hormuz.

The absence of an Article 26-type charging mechanism in the transit-passage regime therefore does not leave the costs of navigational governance legally unaddressed. Although Article 43 was not intended to replicate the charging mechanism of Article 26 under the guise of cooperation, it clearly provides a framework for “burden-sharing” among user States (see Oxman at 422).

Existing doctrine supports a broad reading of Article 43. Rather than being merely symbolic, the provision has a normative character. This reading flows from the article’s wording itself: States “should” cooperate by agreement. For sure, “should” is weaker than “shall,” but it is definitely stronger than “may,” conveying an expectation rather than a purely discretionary option. If user States refuse to cooperate, the consequence cannot be denial or suspension of transit passage. Strait States may, however, decline to provide navigational and safety aids, as Nandan suggests. (at 33-35).

Nonetheless, non-cooperation may have functional consequences, particularly in cases involving serious environmental or pollution hazards. Under Article 38(3) of UNCLOS, conduct inconsistent with the rules governing transit passage remains subject to other relevant provisions, including Articles 39, 41, and 42. Importantly, Article 233 is also relevant where applicable. Article 42 permits coastal States to adopt regulatory measures, and Article 233 can trigger enforcement measures in pollution-related incidents, including documentation and reporting requirements and sanctions such as fines for a flag State vessel. State practice, such as Denmark’s requirements for vessels carrying hazardous substances, further illustrates the scope of such regulatory powers without necessarily establishing a basis for fully obstructing transit passage under Article 44. Moreover, at least from Iran’s perspective, the applicable regime in the Strait of Hormuz, particularly in its northern corridor, is that of innocent passage rather than transit passage, giving the coastal State greater authority.

Article 43 becomes particularly significant because the costs of safe navigation extend beyond the “specific services” chargeable under Article 26. As Febrica argues (at 98), costs such as installing and maintaining navigational aids and preventing or controlling pollution fall outside that category, creating a need for the cooperation and cost-sharing contemplated by Article 43.

Viewed in this light, Point 5 of the Iran/US Islamabad MoU is particularly revealing. Rather than focusing on “tolls,” it refers to “arrangements” and the “future administration” of the Strait’s “maritime services,” provides for the safe passage of commercial vessels “with no charge” for “60 days only,” and envisages future Iran-Oman dialogue “in discussion with other Persian Gulf littoral States,” consistent with “applicable international law” and without prejudice to the “sovereign rights” of Iran and Oman. This carefully chosen language closely aligns with the Article 43 architecture.

If the MoU is to provide a political framework for the future governance of Hormuz, Article 43 offers a ready legal basis for translating that framework into cooperative arrangements. At the lex lata level, it leaves room for such arrangements to be developed through subsequent agreements. The question is whether Hormuz can now take the next step at the de lege ferenda level by developing a cooperative mechanism modeled on the “Malacca Model”?

Article 43 in Action: A Malacca Moment for the Strait of Hormuz?

Comparative practice suggests that charging for maritime services is not, in itself, incompatible with freedom of navigation. The 1936 Montreux Convention, for example, permits specified dues and charges in the Turkish Straits under a sui generis regime expressly preserved by Article 35(c) of UNCLOS. The Danish Straits offer a different model: Denmark abandoned the Sound Dues under the 1857 Copenhagen Convention, while charges for services such as pilotage, vessel traffic services and ice-breaking remain distinct from the right of passage. While most of these services are voluntary, Danish law makes pilotage mandatory for certain high-risk vessels.

For Hormuz, however, a more relevant comparison is the Malacca and Singapore Straits. Unlike the Suez and Panama Canals, they are natural straits. The voluntary pilotage arrangements of Indonesia, Malaysia and Singapore preserve the distinction between transit and services provided to vessels. More importantly, the three littoral States established a Cooperative Mechanism to engage user States and the shipping industry in maintaining navigational and safety infrastructure. The mechanism has also been described as the first practical implementation of Article 43 (see also here).

The Malacca Model’s innovation is in its institutional architecture: a Co-operation Forum bringing together littoral and user States, a Project Coordination Committee for identifying and coordinating specific projects, and an Aids to Navigation Fund supporting navigational aids. Contributions can be financial or in kind, allowing States and other beneficiaries of safe navigation to share its costs without making payment a condition of transit.

The Malacca experience thus gives practical content to Article 43, demonstrating how its requirement of cooperation “by agreement” can be operationalized through institutional arrangements, project-based coordination and dedicated financing mechanisms. Adapted to Hormuz’s particular circumstances, this model could inform a jointly administered Iran-Oman regime for financing navigational safety services rather than transit itself, an approach some analyses have suggested could be legally defensible (see also)

The comparison nevertheless has limits. Hormuz differs from Malacca in its geopolitical setting, littoral States, and, most importantly, the disputed passage regime. Its geography is also distinctive: the Strait lies entirely within the territorial seas of Iran and Oman and connects the semi-closed Persian Gulf to the high seas, rather than two parts of the high seas under the Corfu Channel judgment. So, any maritime route into or out of the Persian Gulf necessarily passes through waters under the sovereignty of one or both States.

A future “Hormuz Maritime Cooperation Mechanism,” developed by Iran and Oman, could build on this logic and adapt the transferable elements of the Malacca model. It could provide a framework for user States and other beneficiaries of safe navigation to contribute to its costs under an institutional arrangement designed by the coastal States. This matters because safe navigation through a strategic strait is not only a burden for strait States. A vessel transiting Hormuz may be bound for China, carry European-owned cargo, fly the Panamanian flag, be insured in Europe, and be Greek-owned, yet all depend on the infrastructure that makes passage safe. Moreover, security, navigational safety, and maritime and environmental services provided by strait States can reduce risks, lower marine insurance costs, and generate further benefits for user States.

Conclusion

The emerging approach in the Persian Gulf may, in essence, be seen as a “Malacca-isation” of Hormuz, bringing a more fundamental question to the fore: who should bear the costs of keeping Hormuz safe and secure for those who depend on it?

The 2026 Hormuz crisis offers an opportunity to move beyond the binary debate over lawful and unlawful “tolls” by distinguishing three concepts: transit tolls, charges for specific services, and cooperative contributions to navigational infrastructure and maritime governance.

Read in isolation, Article 26(a) offers a relatively simple answer. Read together with Articles 41, 42, and, most importantly, Article 43, UNCLOS provides a broader institutional framework for sharing the costs of safe navigation through international straits. As Iran and Oman continue their talks, Article 43, an underused capacity, could find its way into future political and legal understandings by offering cooperative arrangements tailored to Hormuz, designed by its coastal States and expected to draw contributions from user States as beneficiaries.