On 18 May 2026, the Iranian government formally announced, via an official social-media channel, the establishment of the Persian Gulf Strait Authority (PGSA). The PGSA is presented as the administrative body responsible for regulating maritime traffic through the Strait of Hormuz. Reporting in Lloyd’s List, NPR, Al Jazeera, The Week, Euronews, and Maritime Data on the system the PGSA formalises indicates that the operational arrangement — vessel-by-vessel vetting, IRGC-escorted passage through a pre-approved corridor, payment in Chinese yuan or stablecoins, fees of up to two million United States dollars per VLCC transit — has been running in some form since approximately 13 March 2026. The 18 May announcement is the institutional ratification of an arrangement that has been operating in practice for two months.
This is, in the public record, the most direct and consequential event in the site’s brief: Tehran has built a toll-collecting body for the Strait of Hormuz, has named it, and is operating it. The site has been arguing since 18 April for an institutional configuration at the chokepoint on the Suez or Panama model. Iran has now provided an institutional configuration. It is not, however, the configuration the site has been arguing for. This post reads what the PGSA is in detail, places it against the treaty-backed yardstick, and explains where the gap is.
What the PGSA does, operationally
The vessel-by-vessel process the PGSA formalises operates in five steps. First, the vessel operator contacts an IRGC-connected intermediary and submits an application package containing the vessel’s IMO number, the full ownership chain, the cargo manifest, the intended destination, the complete crew list, and the insurance documentation. Per Maritime Data, the package is forwarded to the IRGC Navy’s Hormozgan Provincial Command. Second, the package is processed through three screening layers: sanctions screening (whether the vessel or its ownership chain is flagged for screened relationships); cargo alignment screening, with crude and oil products receiving priority over container, dry-bulk, or LNG cargoes; and what is described as “geopolitical vetting,” in which the flag-state and ownership profile is classified into a five-tier system that determines whether transit will be permitted and on what terms. Vessels associated with the United States and a defined set of allied governments are excluded by the geopolitical vetting layer; vessels associated with what the Iranian government characterises as “friendly nations” — China, Malaysia, Egypt, South Korea, and India are commonly cited — are admitted with varying fee structures.
Third, if the application is approved, the IRGC issues a clearance code and a routing instruction. The routing places the vessel in a corridor close to the Iranian coastline between the islands of Qeshm and Larak, inside Iranian territorial waters. Fourth, the vessel is hailed by VHF radio at the corridor entry point for clearance-code verification and is then escorted by an Iranian pilot boat through the controlled corridor. The Automatic Identification System is typically switched off during the controlled-corridor transit, which is one of the reasons commercial tracker data has shown a near-zero AIS-tracked transit count on the normal route since 15 March. Fifth, the fee is paid. Reporting consistently cites yuan-denominated payment routed through Kunlun Bank using China’s CIPS network outside SWIFT as the primary settlement channel, with Bitcoin and Tether as alternative settlement channels for operators that prefer crypto rails. Per the IBTimes reporting, one cited fee was approximately one and a half million pounds sterling, or about two million United States dollars per transit, with the rate scaled by vessel size and cargo on a basis Tehran has not published.
The transit volume so far
Twenty-six vessel transits used the IRGC-controlled corridor between 13 March and the late-March reporting window. Total transit volume since the start of March is in the range of one hundred and forty-two vessels, with sixty-seven per cent of the traffic showing direct Iranian affiliation, a figure that rises to approximately ninety per cent in the most recent reporting. Approximately one million barrels per day of Iranian crude has moved through the corridor since the system began. Eight Very Large Gas Carriers carrying Iranian LPG have transited since 1 March. Approximately two thousand vessels are reported to be awaiting passage on both sides of the strait. The system is, in operational throughput, well below the pre-war benchmark of approximately one hundred and thirty-eight transits per day, but it is producing measurable flow for vessels that meet its vetting criteria.
What the PGSA does and does not constitute
The PGSA, in formal institutional terms, is a real body. It has a name. It has an administrative address (an official email channel and a social-media presence). It has an articulated process. It has staff (the IRGC Navy’s Hormozgan Provincial Command, the intermediaries, and the pilot-boat crews). It is collecting fees and operating a corridor. Iranian officials have publicly suggested that the revenue potential of the system, in fully operational state, is on the order of one hundred billion United States dollars annually; billboards advertising the figure have appeared in the Tehran metro system. The Iranian Parliament’s Civil Affairs Committee has drafted legislation to formalise the arrangement as compensation for “maritime security.” The body, the process, the fees, the legislation are all real.
What the PGSA is not, on its present design, is an authority of the kind the site has been arguing for on the Suez and Panama model. The gap is not in whether an institutional body exists; the gap is in the design of the body. Six features distinguish the PGSA from the treaty-backed standard, and each is worth being explicit about.
First, the administering body. The PGSA’s physical enforcement is the IRGC Navy, which the United States government and the European Union have both designated as a foreign terrorist organisation. The nominal operator is the Iranian Supreme National Security Council. Suez and Panama are administered by civilian bodies insulated from direct military command — the Suez Canal Authority as a statutory civilian authority of the Egyptian government, the Panama Canal Authority as a constitutionally autonomous body under Title XIV of the Panamanian constitution. The administering-body question was set out in the new-chapter post, and the PGSA confirms the unilateral framework’s answer.
Second, the equal-access principle. The PGSA’s five-tier flag-state classification differentiates transit on the diplomatic posture of the vessel’s flag-state government, which converts the toll from a services fee into a political instrument. The Trump-Xi summit post read the 14-15 May joint statement’s rejection of “a charge for transiting” as a multilateral rejection of exactly this differentiation. The PGSA’s 18 May formal announcement is the institutional opposite of what the Beijing communique committed to.
Third, the currency of settlement. Yuan, Bitcoin, and USDT are the cited channels, with Kunlun Bank and CIPS as the banking rail. Suez and Panama settle in United States dollars through named major banks. The dollar denomination at Suez and Panama is not an ideological choice; it is the operational consequence of the fact that global shipowners, charterers, and protection-and-indemnity clubs settle in dollars and need to be able to pay their chokepoint authority in the same currency, lawfully and routinely. The yuan/crypto channel choice closes the PGSA to the operator class that transits Suez and Panama every day. The buyer-leg implications were set out in the Hengli post; the channel-leg implications in the Tether stablecoin settlement post.
Fourth, the published tariff. Suez and Panama publish their tariffs on schedules differentiated by vessel type, tonnage, cargo, and laden condition, with rates that the operator class and the underwriter class can read, plan against, and price into commercial decisions. The PGSA fee is, on the public reporting, negotiated case-by-case in a range up to two million United States dollars per VLCC transit, with the rate scaled by vessel and cargo on a basis the PGSA has not published. The case-by-case structure is incompatible with the routine commercial planning the operator class requires; the 25 April ICS statement post documented the operator class’s formal position on this.
Fifth, the published statistics. Suez and Panama publish monthly statistical bulletins covering transit volumes, cargo composition, fee receivables, incident reports, and operational notices. The bulletins are the institutional record that allows the underwriter class, the buyer class, and the commercial planners in the supplier and consumer economies to anchor their commercial decisions. The PGSA’s transit volumes are presently reported, when at all, through commercial-tracker estimates against AIS-disabled corridor traffic. There is no PGSA statistical bulletin. The institutional record is, at the present design, opaque.
Sixth, the dispute-resolution forum. Suez and Panama operate standing dispute-resolution arrangements for tariff disputes, transit-priority disputes, salvage disputes, pilotage disputes, and casualty management. The PGSA, in its current public-facing description, does not name a dispute-resolution forum. Disputes between vessel operators and the IRGC’s corridor administration are, in the present configuration, presented and resolved through the same administrative-and-enforcement channel that operates the corridor in the first place, with no institutional separation between operator and adjudicator.
Why this matters for the negotiation
The PGSA’s 18 May announcement lands four days after the Trump-Xi summit and three days after the seizure-and-sinking incidents of 14-15 May analysed in the ten-day-test post. The timing is unlikely to be coincidence. The Iranian government, having transmitted the 14-point proposal containing the “new mechanism for the Strait of Hormuz” placeholder analysed in the mechanism-language post, is filling in the placeholder with the institutional configuration the unilateral framework specifies. The formal announcement is, in part, a negotiating-position signal: this is the body the United States, China, the GCC, and the operator class will have to engage with if the chokepoint is to function on terms acceptable to Tehran.
The other principal parties are, in their respective public records, taking incompatible positions. The United States, through the OFAC compliance posture and the Treasury rules analysed in the Treasury post, has closed the dollar payer set to PGSA fees. China, through the Trump-Xi summit’s joint communique, has formally indicated opposition to “a charge for transiting.” The GCC, through the Jeddah communique and the Rubio-Bahrain UN draft resolution analysed in the GCC long-term arrangement post, has formally indicated preference for an arrangement on UNCLOS freedom-of-navigation principles. The operator class, through the 25 April ICS statement, has indicated that the Iranian unilateral toll claim has no basis in international law. The PGSA is operating on terms that none of the other principal parties to the chokepoint dispute is in a position to accept on an institutional basis.
What the institutional answer still needs to do
The PGSA establishes one important institutional fact, and it is worth acknowledging directly: Tehran has accepted, by the act of constituting the body, that the chokepoint requires an institutional administering authority of some kind. The implicit premise of the 25 April Hengli post, the 30 April new-chapter analysis, and the 4 May mechanism-language post — that the chokepoint problem is structurally an institutional problem — is now publicly conceded by the principal party that had previously held the most ambiguous position on the question. The disagreement among the principal parties is no longer about whether the chokepoint needs an institutional body. It is about which institutional configuration it gets.
The site’s position on which configuration the chokepoint gets is, in the present moment, unchanged. The configuration that meets the operator class’s requirement of equal-access freedom-of-navigation, the United States and China’s joint position on no-charge-for-transiting, the GCC’s preference for a permanent long-term arrangement on UNCLOS principles, and the riparian states’ interest in routine commercial throughput is a treaty-backed authority on the Suez or Panama model, with a civilian administering body insulated from direct military command, a published equal-access tariff structured as a services fee for chokepoint operations, dollar-denominated settlement through named major banks, monthly statistical bulletins, and a recognised dispute-resolution forum. The comparison page sets out the institutional arithmetic. The rate schedule proposes the services-fee tariff. The calculator prices a transit against it. The 18 May PGSA announcement is the moment at which the institutional question becomes structurally explicit on both sides of the negotiation. The configuration that closes the gap is the work of the weeks ahead.
Sources: Lloyd’s List, “Tehran’s ‘toll booth’ system is now controlling Hormuz traffic” (LL1156720); Lloyd’s List, “Shipping seeks clarity over Tehran toll booth requirements for Hormuz safe passage” (LL1156856); Al Jazeera, “Tehran’s ‘toll booth’: How Iran picks who to let through Strait of Hormuz,” 26 March 2026; NPR, “Iran implements new system to collect fees from ships in Strait of Hormuz,” 14 May 2026; Euronews, “Iran sets up Hormuz transit authority to charge ships for passage,” 18 May 2026; The Week, “Explained: How Iran’s new ‘Persian Gulf Strait Authority’ runs the Hormuz toll transit process for vessels,” 11 May 2026; IBTimes, “Strait of Hormuz ‘Toll Booth’ Implemented? Iran Tightens Control with New Fees and Vetting System in Key Oil Chokepoint”; Maritime Data, “Tehran’s ‘toll booth’ system is now controlling Hormuz traffic”; Daily News Egypt, “Iran’s Revolutionary Guard imposes yuan-based tolls for Strait of Hormuz transit: Bloomberg,” 4 April 2026; CNBC, “How Iran turned a tiny island into an oil ‘toll booth’ as Tehran cements grip on global energy flows,” 2 April 2026; TRM Labs, “Iranian Crypto Tolls in Strait of Hormuz”; House of Saud, “Iran Charges $2 Million Per Ship to Cross the Strait of Hormuz”; Suez Canal Authority statutory framework and tariff publications; Panama Canal Authority constitutional and tariff documentation under Title XIV of the Panamanian constitution; United Nations Convention on the Law of the Sea, 1982, Articles 26 and 38; this site’s prior analyses on the UNCLOS vacuum (24 April), the cost stack (23 April), the Hengli buyer-leg (25 April), the Tether stablecoin settlement post (25 April), the ICS statement (25 April), the Treasury position (30 April), the new-chapter framework (30 April), the 14-point mechanism language (4 May), the GCC long-term arrangement (11 May), the ten-day test (15 May), and the Trump-Xi summit (15 May).