Oil industry leaders have reportedly expressed their disapproval to the Trump administration regarding Iran’s proposal to levy tolls on the strategic Strait of Hormuz.
Executives from various oil companies have reached out to Secretary of State Marco Rubio and Vice President J.D. Vance to voice their concerns. A meeting was held with senior administration staff in the State Department on Wednesday to discuss the matter, reported POLITICO.
The industry leaders worry that the proposed tolls could add about $2.5 million per shipment through higher insurance and fees, costs likely to be passed on to consumers. They also fear it may set a precedent for countries like Singapore and Turkey to impose similar charges on key routes such as the Strait of Malacca and the Bosporus.
Furthermore, the executives worry that paying the toll could potentially put companies at risk of violating sanctions on Iranian officials. Despite these concerns, White House Press Secretary Karoline Leavitt stated that the administration is working with a “more reasonable” set of Iranian proposals, without specifying the changes in the plan. Leavitt did not mention whether the new Iranian proposal includes charging a toll at Hormuz.
White House did not immediately respond to Benzinga‘s request for comments.
Iran Pushes Hormuz Controls
This development comes amid reports of Iran demanding Bitcoin (CRYPTO: BTC) payments at Hormuz. Hamid Hosseini, spokesperson for Iran’s Oil, Gas and Petrochemical Products Exporters’ Union, told the Financial Times that Iran needs to monitor what goes in and out of the strait to ensure these two weeks aren’t used for transferring weapons. His industry association works closely with the state.
Meanwhile, on Wednesday, President Donald Trump suggested that “big money” is to be made and said the U.S. would help with the Hormuz traffic buildup. On several occasions in the past, he has floated the idea of jointly managing the waterway with Iran and is also considering toll collection.
Notably, charging tolls in the Strait of Hormuz would breach the long-standing principle of free navigation, established by the UN Convention on the Law of the Sea in 1994.
Even in March, the oil industry had warned the Trump administration that the energy crisis would likely worsen if the Strait of Hormuz remained shut for a prolonged period. CEOs of Exxon Mobil (NYSE:XOM), Chevron (NYSE:CVX) and ConocoPhillips (NYSE:COP) had conveyed their concerns to Energy Secretary Chris Wright and Interior Secretary Doug Burgum, reported the Wall Street Journal.
At 8:29 am ET, Brent crude oil price was trading 3.34% higher at $97.91 per barrel, as Iran accused Israel of violating the ceasefire by strikes on Lebanon.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by a Benzinga editor.
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