Trump’s Hormuz fee could double the cost of shipping

The fee that President Donald Trump wants to charge ships going through the Strait of Hormuz would significantly increase the cost of transporting oil and other products through the crucial waterway, shipping operators and logistics experts said.

On Monday, Trump said the United States would charge a 20% fee on all cargo shipped through the strait, as a way to recover the cost of providing military protection to vessels using the waterway.

Some analysts said they doubted whether the fee would come into existence because of the costs it would impose. And for ship operators in the region, the prospect of fees is less of a concern right now than the escalation of the conflict between Iran and the United States in recent days.

Still, the fact that the United States, a longtime supporter of freedom of navigation in the strait and elsewhere, is now pushing for a fee, and the sheer magnitude of the charge, is stirring up concern.

Trump did not explain exactly how the 20% fee would be calculated.

But if it were charged on the value of the cargo, it could more than double the cost of shipping oil through the strait.

Rico Luman, a senior economist specializing in logistics at ING Research, said tanker companies charge around $10 a barrel to transport oil from the Persian Gulf to Europe. Given that a barrel of oil costs around $80, Trump’s fee could add another $16 per barrel to ship the oil through the strait, Luman said, taking the overall transportation cost to $26 per barrel.

For a large tanker carrying 2 million barrels of oil, the fee could add more than $30 million in costs. Oil importers would most likely pass on some of the cost to consumers.

The United States and Iran are battling fiercely to win control over ship traffic in the strait, through which one-fifth of the world’s oil was transported before the war between the two countries.

The U.S. military is guiding ships through the strait on routes closer to Oman. Iran has objected to the U.S. operation, saying it must control ship traffic. In recent days, Iran struck vessels that appeared to be using the Omani route, prompting the United States to retaliate with its attacks on Iran.

Scores of ships have gone through the strait with Iran’s permission, taking routes close to the Iranian coast. On Monday, Trump said he was reinstating a U.S. naval blockade of ships that use Iranian ports.

Neil Crosby, head of oil research at Sparta, an energy market analysis firm, said that he was skeptical that the fee would come into existence, but that if it did, it would leave ship operators with a difficult choice. They would have to decide whether to pay the high fee and risk being attacked by Iran, Crosby said, or ignore the United States and work with Iran.

“I see this as a reason for shipowners to get less comfortable in the region, alongside the attacks,” he said.

Two ship operators said the fee was exorbitant and would exceed the amount they charged for shipping cargo through the strait. They requested anonymity to speak freely about Trump’s fee.

Vidya Mani, an associate professor at the University of Virginia and an expert on supply chains, said a 20% fee would be a “significant expense.” She noted that a voluntary fee to go through the Strait of Malacca, in Southeast Asia, was less than 0.5% of cargo value.

Iran has sought to charge ships a fee for going through the strait. It is not clear how many vessels have paid a fee or how much Iran charges.

Commenting Monday on Trump’s fee, Iran’s foreign minister, Abbas Araghchi, said on the social platform X: “20% is of course too much. We will be fair.”

U.S. officials have opposed fees when Iran has sought to impose them, noting that ships were not charged for transiting the strait before the war.

In late June, Secretary of State Marco Rubio said: “No country is allowed to charge tolls or fees on an international waterway. That’s existing international law.”

This article originally appeared in The New York Times.