Risks over Hormuz tolls deter tankers despite ceasefire: sources

Tanker companies and charterers are navigating challenges around transit tolls through the Strait of Hormuz during a two-week Persian Gulf ceasefire, as any payments to Iran could trigger sanctions, 13 brokers, owners and charterers told Platts this week.

While US sanctions on trading Iranian oil were eased in March, no such decision has been announced on Iranian companies and state entities, the sources said.

Iran has yet to announce a clear passage mechanism after some Iranian parliamentarians spoke of a toll per transit through the strait, with future Omani involvement.

"If a transit toll is levied on ships moving in and out of the Persian Gulf, it creates a lot of complications," said a chartering executive with one global commodities trading company. Prospects for payment to transit are a serious cause of concern, as it would not be possible for most companies to do so, the executive added.

Sources with three major tanker companies told Platts, part of S&P Global Energy, that their management and compliance departments have yet to give approval to enter the Strait of Hormuz.

For normalcy to resume, not only should the already laden ships move out, but there should be a seamless opportunity for them to enter and load fresh cargoes, in what are still perceived as highly risky waters, they said.

Safe transit depends on verified security assurances based on alignment with recognized international maritime guidance and insurance frameworks, a spokesperson for tanker company Hafnia told Platts on April 9.

Hafnia does not foresee an immediate return to normal operating conditions in the Strait of Hormuz, the spokesperson added.

Oil shipping major Torm will not return to the Strait of Hormuz in the current situation, a company spokesperson told Platts, adding that greater certainty is needed. The spokesperson said that the company also does not have ships available that could enter and exit the area within the next two weeks.

Major charterers and oil trading companies will not be able to make any payments to Iran to enable movement of their ships and cargoes through the Strait of Hormuz unless an international legal system is put in place for the purpose, multiple shipping brokers, insurance brokers, shipowners and charterers said.

Sanctions

Iran's Islamic Revolutionary Guard Corps is a sanctioned entity under the US Department of the Treasury, and therefore, transit payments to it are close to impossible, a maritime insurance broker said.

The IRGC has also been listed as a terrorist organization by the US since April 2019. Therefore, if payments are made to it or its associates to facilitate transit through the Strait of Hormuz, shipping companies and charterers will invite sanctions issues upon themselves, a maritime insurance executive said.

Insurance companies provide war risk cover to ships and cargoes on the condition that they will not deal with entities and organizations that are under sanctions or listed as terrorist organizations, the executive said.

Except when toll transit payments are informal, ship movement through the Strait of Hormuz would require permission from the owners' and charterers' countries of origin before any payment is made to Iranian entities, a ship insurance underwriter said.

"We have had no discussion with Iran on [Hormuz tolls]," India's foreign ministry spokesman, Randhir Jaiswal, said in a daily briefing April 8.

A ship's ownership is generally linked to multiple origins because it is registered under the flag of a specific country, which is usually not the same as the place where its holding company may be listed. Its technical and commercial management is handled by entities that could be from different countries, and its board of directors could also come from several origins, insurance brokers said.

In the past, when piracy in the Horn of Africa near Somalia was at its peak and ransom had to be paid to get ships and their crew released, a procedure was put in place to ensure that none of the receivers was under sanctions or listed as terrorists, a maritime insurance lawyer involved in such deals said.

Similarly, transit through the Strait of Hormuz would require a legal infrastructure involving the UN and the International Maritime Organization, he added.