Washington: US oil producers are expressing strong opposition to a new proposal involving the strategic Strait of Hormuz, where Iran is seeking to impose tolls on oil shipments as part of President Donald Trump's peace plan with Iran. This development is creating significant friction between the oil industry and the Trump administration.
According to Azeri-Press News Agency, oil company executives have been actively reaching out to key figures in the US government, including the White House, Secretary of State Marco Rubio, and Vice President J.D. Vance. The executives are voicing their concerns over the proposed tolls, which would mark a significant shift in how oil shipments navigate the Strait of Hormuz, a vital waterway through which a fifth of the world's oil supply passes.
An industry consultant, speaking anonymously, emphasized the industry's dissatisfaction, questioning the logic behind allowing Iran to charge tolls. This individual noted that the administration's response to these concerns has been somewhat receptive but non-committal.
Executives from the oil industry met with senior State Department officials to discuss the potential financial implications of the tolls, estimated to add $2.5 million per shipment in tolls and increased insurance rates. They warned that conceding to Iran's demands could set a dangerous precedent for other countries to impose tolls on critical trade routes and could also put companies at risk of violating sanctions against Iranian officials.
The industry is attempting to communicate its concerns to President Trump directly but is treading carefully, given the sensitivity of the issue and its potential impact on Trump's legacy. The White House has not provided a clear response to these concerns, instead directing inquiries to a press conference where White House Press Secretary Karoline Leavitt mentioned that the administration is working with a more reasonable set of proposals from Iran.
Despite Iran's proposal, which includes a toll of $2 million per ship, there is skepticism about its acceptance. Energy and international law expert Jason Bennett highlighted that the Strait of Hormuz has traditionally been an open international waterway, with no legal recognition of Iran's right to control it.
President Trump has suggested the possibility of a joint venture with Iran over toll operations, though no concrete plan has been established. Meanwhile, traffic through the Strait remains halted following recent geopolitical tensions.
Diplomats from various countries have raised concerns about the potential for Iran to selectively charge tolls based on political alliances, as evidenced by reports of Malaysian ships passing through the Strait without paying tolls. This situation has fueled concerns about the broader implications of allowing a toll system in international waters.
Most shipping companies are resistant to the toll proposal, viewing it as an unsustainable and politically risky concession. Arthur Leichthammer from the Jacques Delors Center in Berlin emphasized the potential for such tolls to be used as a form of political leverage.
The debate continues as the administration navigates the complexities of international diplomacy and economic interests in the region.