Iran's control of the Strait of Hormuz, through which about a fifth of the world's oil supplies pass, has thrown the global economy into turmoil. But how is Iran consolidating control of this strategic strait? This question is answered in an analysis for "Reuters" by Devjot Ghoshal, Ahmed Rashid, Parisa Hafezi, Gavin Finch and Saurabh Sharma.
The report interviewed 20 people familiar with the evolving mechanism, including Asian and European shipping sources, as well as Iranian and Iraqi officials, reviewed Iranian documents related to the vetting process and analyzed ship movements.
All of this offers insight into how the Iranian scheme operates, with the powerful Islamic Revolutionary Guard Corps playing a central role.
According to the US military, about 1,500 ships with about 22,500 sailors on board were blocked in the Persian Gulf by early May. The maritime impasse stems from Iran's ability to attack ships in the strait from the coast. Control of the Strait of Hormuz has turned the conflict into what the head of the International Energy Agency has called the worst energy crisis in world history. The U.S. Navy has responded by imposing its own blockade of Iranian ships and cargo with a cordon outside the strait.
Only a small fraction of ships have passed through the waterway. Between April 18 and May 6, fewer than 60 ships passed through, according to an unpublished analysis by the U.S. firm SynMax Intelligence. Before the war, about 120 to 140 ships passed through the strait on a typical day, about half of them oil tankers.
U.S. citizens are prohibited from doing business with the Iranian government under U.S. sanctions laws. Foreign nationals can also face "secondary sanctions" for dealings with Iranian entities. In addition, many Western governments maintain their own sanctions and restrictions related to Iran.
The U.S. Treasury Department issued a statement on May 1 warning of "the sanctions risks associated with making these payments to the Iranian regime or obtaining assurances from it of safe passage".
"Reuters" spoke to more than 20 people to understand how Iran is consolidating its control of the Strait of Hormuz. Maritime officials involved in managing and navigating the route for cargo ships and tankers say the journey is dangerous.
The new Iranian mechanism involves a tiered system that gives priority to ships linked to Russia and China, followed by countries such as India and Pakistan, which have close ties to Tehran, and then government-to-government agreements that allow ships to pass, Reuters has found.
"The department stands ready to take action against any foreign company that supports illicit Iranian trade," the U.S. Treasury Department said in response to questions about the system.
Two European shipping sources said some ships not covered by intergovernmental agreements were paying Iranian authorities more than $150,000 to ensure safe passage through the Strait of Hormuz.
Ships are sometimes charged security and navigation fees, which vary depending on the cargo, two senior Iranian officials said. Neither official provided specific figures, but one said "not all countries are subject to these fees".
"Reuters" could not independently confirm the amounts charged to the ships or the total amount that has gone to Iran's treasury.
Under international maritime law, governments cannot charge fees for safe passage through the strait. But there can be fees related to security or services, as long as ships from all countries are treated equally.
These payments and the names of the shipowners who paid Iranian authorities to retrieve their ships are closely guarded secrets because such payments would violate U.S. economic sanctions on the Iranian government. "Reuters" was unable to determine how the money was transferred or to which Iranian organization.
In addition to potential charges, the violators would also lose their insurance coverage for making payments that could benefit the Islamic Revolutionary Guard Corps (IRGC), as it is an internationally designated terrorist organization, according to two marine insurance experts.
The shipowners’ willingness to work directly with Iran despite the risks shows the extent to which the strait is under the Islamic Republic’s control, said Danny Citrinovich, a former Israeli intelligence officer who specializes in Iran research and analysis.
"The straits will only be blocked or opened with the approval of the Iranian regime," said Citrinovich, who is now at the Israeli think tank the Institute for National Security Studies.
"Some will pass through thanks to political alliances, others will have to pay, others will be turned back. This is the new norm," he stressed.
In response to the findings by "Reuters" Regarding Iran's new control mechanism, the Chinese Foreign Ministry called for the opening of the Strait of Hormuz and said it was concerned about "future arrangements for the strait." "Such arrangements should be in accordance with international law and practice and take into account the legitimate security concerns of coastal states and the legitimate demands of regional countries and the international community," the ministry said in a statement. Beyond government agreements, the process of obtaining a transit permit from Iran involves a detailed vetting procedure conducted by the Islamic Revolutionary Guard Corps, Iran's elite fighting force, according to three Iranian sources and a European shipping source. The Islamic Revolutionary Guard Corps reviews a so-called document of ownership provided by a ship owner or operator and submitted through an intermediary, the sources said. sources.
"The affiliation check is to determine whether the ship has any connection to the United States or Israel," the European shipping source said.
The Guards take about a week to review the documentation, and during the process they may ask to physically inspect the ship, the source said.
The Islamic Revolutionary Guard Corps requires ship owners to disclose details including the value of the ship's cargo, its flag, its origin and destination, the registered owner and manager, and the nationality of the crew, according to documents reviewed by Reuters that were sent to shipping industry sources by Iran's Gulf administration. The authority was established in recent weeks to approve and tax the transit of ships.
The inspection is being carried out by Iranian state institutions, including the Ports and Maritime Organization, the Ministry of Industry, Mines and Trade, the National Shipping Organization and the security watchdog of the Supreme National Security Council, according to the three senior Iranian officials.
The Islamic Revolutionary Guard Corps (IRGC), which has broad oversight of Iranian security, is also involved in assessing the ships, the officials said.
The bilateral transit arrangements include an additional step: Countries contact Iran’s foreign minister to request permission. The minister forwarded these documents to the Supreme National Security Council, which includes the IRGC and representatives of Supreme Leader Mojtaba Khamenei, one of the officials said.
"Then a decision is made and communicated to the relevant authorities, including the IRGC," he said, adding that the IRGC provides the coordinates and instructions necessary for a safe passage.
For the passage of the ship through the Strait of Hormuz, the "Agios Fanourios I", loaded with Iraqi crude oil and bound for Vietnam, the Iraqi government worked with its state-owned oil trader SOMO to strike a deal with Iran under the leadership of then-Iraqi Prime Minister Mohammed Shia al-Sudani.
Three Iraqi Oil Ministry officials said they had handed over the manifest and information about the crew of the "Agios Fanourios I" to the Iranians before its passage.
The Iraqi government did not respond to a request for comment on its agreements with Iranian authorities or details about the "Agios Fanourios".
Other countries have worked out various agreements. Among them is India, which imports about 90% of its oil needs and about 50% of its gas, much of which passes through the Strait of Hormuz.
New Delhi uses its embassy in Tehran to liaise with Iranian authorities, including the Islamic Revolutionary Guard Corps (IRGC) and the Iranian navy, which inspects ships that India wants to sail from the Persian Gulf, according to an official from the Indian shipping ministry.
"Once everything is checked, the ship's captain is given a route to follow and the ship sails out of the area with guidance from the Iranian navy. The captains are strictly instructed to follow the given route," the official explained. The ships have been ordered to turn off their location transponders and not use satellite communications, he added.
Once Iran gives permission, the Indian navy directly contacts the captains of Indian-flagged ships in the Gulf and gives them waypoints, said an Indian shipping industry source with direct knowledge of the process.
"The Indian navy has also told us that if the Iranians ask you to stop, then you have to stop. If they ask you to move, then you have to move. And we are following those instructions," the source said.
So far, 13 Indian-flagged ships have passed through the Strait of Hormuz, while 13 remain blocked west of the waterway, India's shipping ministry said on May 14.
India, Russia, Pakistan and Vietnam did not respond to requests for comment on Iran's control of the strait.
For many vessels, the route from the Persian Gulf and through the Strait of Hormuz involves passing through numerous Iranian checkpoints, often manned by armed personnel, according to two shipping industry sources and three Iranians.
The "Agios Fanourios I" passed Iranian military checkpoints at Abu Musa, Golyam Tunb and Larak. "Reuters" verified those coordinates against publicly available ship location data and multiple sources familiar with similar voyages.
As it approached the island of Hormuz, at the mouth of the strait, the ship was briefly stopped by Islamic Revolutionary Guard Corps speedboats, according to an Iranian official familiar with the matter.
It said it had information that there was a possible contraband cargo on board. The information turned out to be false, he said, and after a brief period of confusion and inspection of the ship, the "Agios Fanourios I" continued on its journey.
Similarly chaotic communication was the likely cause of an attack on two Indian-flagged ships attempting to transit the Strait of Hormuz last month, an Indian shipping industry source said. The incidents have spooked Indian sailors stranded in the Persian Gulf.
"These ships don't have armor or anything like that," said an Indian shipping industry source. The only targets for the gunmen, he added, are the crew quarters: "They can't shoot at the tanks because they carry flammable liquids."
An Indian sailor who passed through the Strait of Hormuz aboard a cargo ship said the ship waited in the Persian Gulf before his shipping company received permission from the Islamic Revolutionary Guard Corps (IRGC). It was then instructed to approach Larak Island and the Iranian navy made contact. Naval officials ordered the captain to show the ship's flag and reveal details about the ship, after which they began talks with the shipping company. The Iranians repeatedly asked about the nationality of the crew, the sailor said.
"After a few hours, the captain received an itinerary from the IRGC," he said. Escorted by smaller Iranian naval boats, the ship was ordered to steer carefully for sea mines.