The Wall Street Journal reports:

Iran told mediators it would limit the number of ships crossing the Strait of Hormuz to around a dozen a day and charge tolls under the cease-fire struck by President Trump, showing Tehran plans to tighten its grip on the world’s most important energy-shipping lane.

Ships that pass will have to coordinate with the Islamic Revolutionary Guard Corps, the powerful paramilitary group that has been labeled a terrorist organization by the U.S. and the European Union, Arab mediators said.

Four ships were allowed to pass Wednesday, the fewest so far in April, according S&P Global Market Intelligence. Iran is requiring ships to work out toll arrangements ahead of time and then pay the fees in cryptocurrency or Chinese yuan, mediators and shipbrokers said.

Iran’s demands show how it has used the war to create a new source of leverage and potentially revenue. It seized control of the waterway during the fighting by targeting ships that tried to pass without its permission. The arrangement is now being entrenched during the two-week cease-fire the U.S. and Iran agreed to Tuesday.

The possibility of Iran’s permanent role in the administration of the waterway is alarming the Gulf’s energy producers, who rely on the strait for the bulk of their exports, and to energy consumers across Europe and Asia.

The U.S. is still pushing publicly for a free and open strait. But Iran isn’t showing a willingness to loosen its grip. In the waterway Wednesday morning, Iran was broadcasting via marine VHF radio that ships without permission to cross from the Revolutionary Guard navy risked being destroyed, according to a recording a crew member shared with The Wall Street Journal. The message was addressed to all vessels in the Persian Gulf and Sea of Oman.

“The Strait of Hormuz has definitely become as important as the missiles and the nuclear program for them,” said Danny Citrinowicz, the former head of the Iran department for Israeli defense intelligence. “For them, control is a must.”

Iranian Foreign Minister Abbas Araghchi said traffic through the waterway during the two-week cease-fire will be under the oversight of Iran’s armed forces. The comments, on social media, were reposted by Trump and the White House.

The Trump administration’s acknowledgment of the demands risks entrenching Iran’s dominance over a significant portion of the world’s oil supply—about 20 million barrels a day, or some 20%.

Only six weeks ago, ships moved freely through the strait before the war without any military coordination with Iran. The new arrangements are altering the balance of power in the Persian Gulf and expanding Iran’s global influence despite the battering it suffered in the five-week war.

Gulf energy producers are strongly opposed to any arrangement that would require making payments to Iran. Mediators expect Iran’s demand to complicate talks in the coming weeks toward a permanent cease-fire.

“Today, control over the Strait of Hormuz offers a different kind of leverage,” wrote Hamidreza Azizi, a visiting fellow at the German Institute for International and Security Affairs, in an analysis published this week. “One that is immediately visible in global markets, continuously exercisable, and less dependent on prolonged negotiation cycles and diplomatic processes.”

Shippers say Iran is already establishing a system of fees. In recent weeks, it has worked to formalize a tiered approach with ships carrying Iranian oil or goods passing freely, ships from friendly countries paying some sort of toll, and ships from countries aligned with the U.S. or Israel blocked altogether. [Continue reading…]