Iran has introduced a mandatory insurance requirement for all vessels transiting the Strait of Hormuz, mandating shipowners to obtain coverage approved by Tehran’s newly established Persian Gulf Strait Authority (PGSA). The insurance will initially be provided free of charge, with costs borne by the Iranian government.
The move, outlined in a PGSA terms-and-conditions document reviewed by Lloyd’s List, comes despite the recently signed US-Iran Memorandum of Understanding (MOU), which guarantees safe and toll-free passage for commercial vessels through the strategic waterway for a 60-day period.
According to the PGSA document, vessel owners are required to secure the designated insurance coverage before transiting the strait. While no fees will be charged during the initial 60-day period, Iran has indicated that insurance premiums may be introduced thereafter.
“This insurance is provided free of charge to the vessel owner, with all expenses covered by the Islamic Republic of Iran,” the document states. “The PGSA reserves the right to introduce insurance fees in the future. Owners will then be required to purchase and renew coverage accordingly.”
The new regulations represent Iran’s most explicit effort to establish administrative control over vessel transit through one of the world’s most critical maritime chokepoints.
In addition to the insurance requirement, Iran has insisted that vessels use a designated northern transit route near Larak Island, rejecting the growing practice of ships utilizing a US-protected southern corridor closer to the Oman coast.
“Passage is permitted only via the designated route near Larak Island,” the PGSA stated, warning that any deviation from the prescribed route would be considered a violation.
The authority has designated itself as the sole agency responsible for processing transit applications and issuing passage permits. It also claims the right to impose penalties, revoke transit permissions, or pursue further legal action against vessels that fail to comply with its regulations.
Industry reaction has been largely critical. Several tanker owners operating in the region have questioned the practicality and long-term viability of the Iranian framework.
“It’s madness. This whole situation is a mess,” one major tanker owner with vessels currently transiting the strait told Lloyd’s List.
The US-Iran MOU, signed earlier this week, provides for toll-free passage through the Strait of Hormuz for 60 days while Iran, Oman, and other Gulf states negotiate a longer-term governance and security framework for the waterway.
Shipping companies, Gulf states, and major oil firms have repeatedly opposed any future transit fees, arguing that international waterways should remain free from tolls. International Maritime Organization (IMO) Secretary-General Arsenio Dominguez, who is involved in discussions with Iran and Oman, warned that allowing such charges could create a precedent for other strategic maritime routes worldwide.
US Vice President JD Vance reaffirmed Washington’s position that international waterways should remain free of tolls but emphasized that ensuring uninterrupted navigation through the Strait of Hormuz remains the immediate priority.
The Strait of Hormuz handles a significant share of global oil and gas shipments, making any changes to its governance or transit requirements a matter of considerable importance for international shipping and global energy markets.
