Jacob Stoil and Daphné Richemond-Barak
©2026 Jacob Stoil
Regardless of how the Iran conflict ends, it will have a profound impact on the future of the Middle East, but one relatively poorly publicized aspect of the crisis could affect the global economy and geopolitical dynamics in long-lasting ways. On May 18, 2026, Iran announced the opening of the Persian Gulf Strait Authority, formalizing its claim that the Strait of Hormuz is subject to Iranian (and possibly Omani) authority. It has subsequently added a pretense that any fees the Persian Gulf Strait Authority charges are for mandatory navigational services or an environmental fee. Regardless of the pretense, if the Iranian claim is allowed to stand, the ramifications could resonate globally, shaking foundational principles of international law, disrupting shipping, increasing the likelihood of conflicts, and raising the price of goods.
The Strait of Hormuz qualifies as an international strait under the United Nations Convention on the Law of the Sea (UNCLOS) because it is used extensively for international navigation and connects exclusive economic zones in the Persian Gulf with exclusive economic zones in the Gulf of Oman. These two factors mean that it is subject to the rules of transit passage in peacetime, which guarantee the continuous and expeditious navigation of ships and aircraft. While coastal states retain some authority over safety and pollution, they cannot “discriminate in form or in fact among foreign ships or in their application have the practical effect of denying, hampering or impairing the right of transit passage.” These rules prevent coastal states from using geographic chokepoints as instruments of control over the global marketplace.
Iran has not ratified the international treaty that lays out these rules, but some scholars of international law argue that the right of transit passage still applies as customary international law, pointing to the widespread acceptance of UNCLOS and the consistent practice of transit passage by user states (including the United States, which is not a signatory to UNCLOS). Even if transit passage does not apply, the International Court of Justice famously recognized a right of innocent passage through straits used for international navigation in times of peace and invalidated a coastal state’s attempt to require authorization prior to passage. While the right of innocent passage formulated by the International Court of Justice is less robust than transit passage, Iran’s newly created Persian Gulf Strait Authority violates its core tenets.
The International Court of Justice made clear that vessels passing through international straits cannot be made dependent on the discretion of the coastal state during peacetime. Any attempt to condition navigation on political alignment, authorization, or payment would exceed what even a restrictive reading of customary law permits. Claims that coastal states may “close” or operationally control the Strait of Hormuz in peacetime conflate a coastal state’s limited regulatory rights with a broad authority not recognized by international law. The Persian Gulf Strait Authority, whether it includes other countries such as Oman or not, would, therefore, contradict customary international law.
In March 2026, the United Nations Security Council affirmed that any “attempt to impede lawful transit passage or freedom of navigation in these international waterways constitutes a serious threat to international peace and security,” It did so for a good reason. The PGSA or any other body established to authorize and control passage in the Strait of Hormuz during peacetime would risk setting a precedent that others might invoke. For example, China has often asserted that the Taiwan Strait and parts of the South China Sea are internal waters and it can, therefore, restrict others from transiting them. Russia likewise has claimed the Northern Sea Route between the Atlantic and Pacific Oceans constitutes territorial waters, which it has the right to control. The United States actively disputes these assertions, including by conducting freedom of navigation operations in the Pacific Ocean, based partly on the arguments that keep states from exercising control over the Strait of Hormuz.
Should the newly established body be allowed to operate, de facto or de jure, it would substantially weaken the US argument that coastal states lack control over international straits. It could also lead to a cascade effect if coastal countries in geopolitically strategic locations around the world, including Egypt, Indonesia, Morocco, Singapore, the United Kingdom, and Yemen, seek to use this development to their advantages, disrupting global commerce, and raising shipping and insurance costs. With the ability to leverage control of straits now up for grabs, the fragile equilibrium created by international law between the rights of coastal states and the rights of passing states is potentially at risk. Tensions could flare around overlapping claims by coastal countries to the same body of water, further exacerbating regional conflicts.
As such, the continued existence of the Persian Gulf Straits Authority, whether as part of an agreement or a fait accompli, is more than just another regional aspect and outcome of the economic warfare waged by Iran and the United States—it is a risk to the very survival of the current system of global commerce and international maritime stability.
Keywords: Iran, trade, Strait of Hormuz, maritime, international law
Jacob Stoil
Dr. Jacob Stoil is the research professor of Middle East security at the United States Army War College Strategic Research and Assessment Department (SRAD), chair of applied history at the West Point Modern War Institute, and a trustee of the United States Commission on Military History. He serves as assistant director of the Second World War Research Group (North America) and holds a doctor of philosophy from Oxford University and a master of arts degree from King’s College London.
Daphné Richemond-Barak
Daphné Richemond-Barak is an associate professor in the Lauder School of Government, Diplomacy and Strategy at Reichman University, where she heads the International Program in Government. She also serves as an adjunct scholar at the Modern War Institute. She co-founded the International Working Group on Subterranean Warfare and The End of War Project (with Laurie R. Blank). Her book, Underground Warfare, was published by Oxford University Press in 2018, and she is the author of Rosenne’s The World Court: What It Is and How It Works (2021, Brill). Prior to joining Reichman University, Richemond-Barak worked as an attorney at the New York office of Cleary Gottlieb and at the International Court of Justice in The Hague. She holds a maîtrise degree from Université Panthéon-Assas (Paris II), a diploma in legal studies from Oxford University, a master of laws degree from Yale Law School, and a doctor of philosophy from Tel Aviv University.
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