China paying Iran’s “toll booth” in Strait of Hormuz

Chinese ships have reportedly been paying Iran a “toll” in exchange for passage through the Strait of Hormuz, the critical chokepoint through which roughly one quarter of the world’s seaborne oil flows.

Tanker and container ship traffic in the region has fallen by more than 90 percent since the United States and Israel launched their war against Iran nearly four weeks ago, with Iranian strikes hitting more than a dozen commercial vessels.

Tehran has said the strait remains open, but only to vessels deemed non-hostile. Ship transits have dropped from an average of more than 130 per day to the single digits, with those still moving reportedly relying on intermediaries linked to firms or governments.

Newsweek reached out to Iran’s Foreign Ministry via email for comment.

Iran’s Islamic Revolutionary Guard Corps has effectively set up a “toll booth” system in the strait, under which vessels that submit documentation and pay clearance fees can receive escorted transit through a single designated corridor near Larak Island in Iran’s territorial waters, according to a report by London-based Lloyd’s List.

A total of 26 vetted vessels were tracked on this route between March 13 and March 25, based on Automatic Identification System data. At least two ships are known to have paid in Chinese yuan.

Lloyd’s List cited three sources familiar with the plan who said operators are required to submit full documentation, including the vessel’s International Maritime Organization (IMO) number, cargo manifest, destination, crew list, and ownership details, to approved intermediaries linked to the IRGC.

Those intermediaries pass the information to IRGC naval personnel for review, including sanctions screening, cargo checks and broader geopolitical vetting, with priority given to oil shipments over other cargoes.

Ships that clear the process receive authorization codes and routing instructions. As they approach, vessels are contacted by radio to verify clearance, and a pilot boat is dispatched to escort them along the approved route around Larak Island.

Lloyd’s List previously reported that several governments, including China and India, have held talks with Iran over the system, and that at least one tanker secured passage in exchange for a payment of around $2 million.

It remains unclear whether COSCO is participating in the scheme. The Chinese shipping giant said Wednesday it would resume deliveries in the Persian Gulf for the first time since early this month.

“Strait of Hormuz is not closed. Ships hesitate because insurers fear the war of choice you initiated—not Iran. No insurer—and no Iranian—will be swayed by more threats. Try respect,” Iranian Foreign Minister Seyed Abbas Araghchi wrote on a Tuesday post on X.

China, a longtime partner of Iran, has condemned the U.S.-Israeli offensive but repeatedly called for the strait to be fully reopened. China sources more than 40 percent of its oil through the waterway. While its large strategic reserves, diversified supply and heavy investment in renewable energy provide a buffer compared with regional peers, China will feel the pinch the longer the crisis continues.

“China has stressed more than once that a drawn-out conflict serves no one’s interests,” Chinese Foreign Ministry spokesperson Lin Jian told reporters Thursday. “The pressing priority is to actively promote peace talks, seize the opportunity for peace and end the fighting. China supports all efforts conducive to deescalation.”

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