The Strait Of Hormuz, Korea’s Energy Security, And The Limits On Charges For Passage

Key Takeaways:

• Calling a toll a “security fee” does not make it lawful under international law. If a ship must pay simply to transit the Strait, the payment remains a passage toll.
• A genuine service does not automatically justify making every ship pay. A coastal State must also have a legal basis for requiring passing ships to use that service.
• Korea can support safer navigation without accepting passage tolls. Korea could agree with other governments to fund projects such as navigational aids, while keeping passage open regardless of whether shipowners or their governments contribute.

Korea’s recent discussions about restoring freedom of navigation through the Strait of Hormuz, including the dispatch of an inspection team to assess conditions there, concern a waterway through which about 70% of its crude-oil imports passed before the conflict. Conditioning passage on payment could raise Korea’s energy costs, undermine established navigation rights, and adversely affect its broader national interests.

The issue is already concrete. The U.S. Treasury’s alert describes Iranian demands for payments and other conditions in exchange for passage. For the Korean government assisting affected businesses, the legal question concerns the authority to impose those demands.

Assessing Passage Charges and Service Fees

The United Nations Convention on the Law of the Sea (UNCLOS) protects transit passage through international straits against interference, discrimination and suspension under Articles 38, 42 and 44. Its separate innocent-passage rules provide a useful comparison: Article 26 prohibits charges merely for passage but permits nondiscriminatory charges for specific services rendered to a ship.

These treaty provisions alone do not resolve the legal question in the strait of Hormuz. Iran has signed but not ratified UNCLOS, so reliance on these rules against it requires establishing the applicable customary international law.

A claimed service justification must also be assessed on its facts. Three situations should be distinguished:

• Payment for passage. If a vessel must pay simply to cross the Strait, the payment is a transit toll. Calling it a security fee or allocating the proceeds to infrastructure does not turn it into payment for a specific service.
• Payment for a service. A fee for towage or pilotage requested by and supplied to a vessel is distinguishable from a passage toll. Whether a particular charge is permissible depends on its legal basis and terms.
• A compulsory service imposed as a condition of passage. Even where a genuine service exists, providing it does not establish authority to require every passing vessel to use and pay for it. That requirement needs a separate legal basis consistent with applicable passage rights.

Funding Navigation Improvements Through Agreement

General navigation improvements may benefit shipping without constituting a specific service supplied to each passing vessel. Cooperation by agreement offers a way to fund those improvements without relying on compulsory passage charges.

UNCLOS Article 43 provides a model for cooperation on navigational aids and pollution prevention. The Malacca and Singapore Straits Cooperative Mechanism illustrates this approach—which has already entered the Hormuz debate—with governments and other participants making voluntary contributions that are separate from passage rights.

Implications for Korea

For the Korean government advising affected businesses, including State-owned entities and private energy purchasers, the immediate task is to document each demand: who imposes it and receives payment, what service is claimed, how the amount is calculated and what happens if the vessel refuses. Those facts will help assess both the charge and any compulsory service requirement. Any contemplated payment also requires a separate sanctions assessment.

If Korea decides to support a regional cooperative arrangement, the agreement should preserve transit passage regardless of participation and avoid recognizing a general coastal-State power to levy transit tolls.