Can Trump take over Hormuz and charge ships to pass? What would this mean for India?

US President Donald Trump has announced that the United States would reinstate a naval blockade of Iranian ports while imposing a 20 per cent levy on commercial cargo transiting the Strait of Hormuz.

Trump has presented the United States as the "Guardian of the Hormuz Strait", arguing that Washington should be compensated for securing one of the world's busiest maritime chokepoints.

However experts and international maritime law say the proposal faces significant hurdles, while analysts warn that any attempt to enforce such a system could have far-reaching consequences for global trade, oil markets and countries heavily dependent on Gulf energy imports, including India.

The announcement also comes as a deadly missile strike on two UAE-flagged tankers in Omani waters that killed an Indian crew member and injured several others.

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Trump's proposal: Blockade for Iran, 20% levy for everyone else

Speaking at the White House and through posts on Truth Social, Trump announced that the US Navy would once again enforce a naval blockade on Iranian ports while allowing international merchant traffic to continue through the Strait of Hormuz under a new payment structure.

Under the proposal, vessels engaged in trade with Iran would be blocked entirely, while commercial ships from all other countries would be required to pay a 20 per cent cargo charge to the US government.

Trump described the payment as compensation for American military efforts to keep the strategic waterway open amid rising tensions with Iran.

The administration said enforcement against Iranian-bound shipping would begin immediately, with US naval assets deployed to monitor commercial traffic.

Trump also told reporters that the United States was "hitting them very hard" and "controlling the strait," while maintaining that a peace agreement with Iran remained possible.

If implemented, analysts estimate the proposed levy could add roughly $16 per barrel to crude oil prices at current levels, amounting to nearly $32 million for a Very Large Crude Carrier (VLCC) travelling through the strait.

Can the US legally take control of the Strait of Hormuz?

The Strait of Hormuz is a narrow waterway, measuring approximately 21 to 24 nautical miles at its narrowest point, with Iran bordering the northern side and Oman controlling the southern coastline. It serves as the only maritime gateway connecting the Persian Gulf to the Gulf of Oman and the Arabian Sea.

Under the 1982 United Nations Convention on the Law of the Sea (UNCLOS) and long-established customary international law, vessels enjoy the right of transit passage through international straits without interference.

Maritime law also does not permit an external country to impose mandatory tolls simply for allowing ships to pass through such waterways.

The International Maritime Organization (IMO) has reiterated that international law does not provide for compulsory transit charges in international straits.

Because the navigational channel lies within the territorial waters of Iran and Oman, experts argue that any unilateral toll system imposed by an outside power would lack legal backing under existing maritime frameworks.

Military realities could make enforcement difficult

The narrow and shallow waterway is particularly vulnerable to asymmetric warfare. Iranian coastal anti-ship cruise missiles, naval mines, fast attack boats and drone swarms all pose significant threats to commercial shipping and naval operations.

A system requiring thousands of commercial vessels each month to stop for inspection, registration or payment could create severe bottlenecks in one of the world's busiest shipping lanes.

Such delays would increase vessels' exposure to military attacks while significantly disrupting global trade.

There are also financial implications. If the waterway were effectively transformed into an active conflict zone through military enforcement, shipping insurers could substantially increase war-risk premiums or even suspend coverage altogether.

Those additional insurance costs alone could discourage commercial shipping regardless of naval escorts provided by the United States.

Gulf conflict escalates after tanker attack

Trump's announcement came only hours after renewed violence in the Gulf. Iranian cruise missiles struck two UAE-flagged tankers — the Mombasa and Al Bahiyah — travelling in Omani territorial waters. The attack killed one Indian crew member and injured several others.

According to UAE authorities, eight crew members were injured, including six Indian nationals and two Ukrainians, with four of the injured reported to be in serious condition.

The UAE Ministry of Defence described the strike as a "brazen attack" that violated international law and said the country reserved the right to respond.

Iran rejects Trump's proposal

Tehran quickly dismissed the US announcement and warned against any attempt to interfere in the management of the strategic waterway.

Iranian Foreign Minister Seyed Abbas Araghchi responded on X with a sarcastic message supporting the idea that whoever secures the strait deserves compensation while insisting that Iran remains its rightful guardian.

"POTUS is absolutely right. Whoever provides secure and safe passage of commercial vessels through the Strait of Hormuz should be compensated for this service.

Iran has always been the GUARDIAN of the Strait and will remain so FOREVER.

20% is of course too much. We will be fair."

Iran's military leadership also warned that it would not permit the United States to interfere in the administration of the strait. Brigadier General Ebrahim Zolfaghari stated that any country providing logistical support for enforcing a US blockade or toll regime would be regarded as participating in an act of war against Iranian sovereignty.

Why India is watching developments closely

For India, the implications extend well beyond the proposed 20 per cent cargo levy. The greater concern is that Trump's proposal comes after months of attacks on commercial vessels and oil tankers in and around the Strait of Hormuz.

Those incidents have already forced shipping companies to reconsider routes, pushed up insurance costs and increased freight charges.

India imports more than 85 per cent of its crude oil requirements, while a significant share of those imports from Iraq, Saudi Arabia, the UAE, Kuwait and Qatar passes through the Strait of Hormuz. The waterway is equally critical for India's liquefied natural gas (LNG) imports.

Before the Gulf conflict escalated in February, roughly one-fifth of the world's oil and one-fifth of global LNG supplies moved through the Strait of Hormuz, highlighting its importance to international energy markets.

Should a 20 per cent surcharge eventually be enforced, Indian refiners would face higher landed crude costs, increasing the country's overall import bill.

Even if the levy itself is never implemented, economists say the broader effects — including higher war-risk insurance, elevated freight charges and rising global crude prices — could still significantly affect India's economy.

A sustained increase in oil prices would widen India's current account deficit, increase inflationary pressures, raise logistics costs and eventually feed into retail fuel prices.

India's state-owned oil marketing companies, including IOCL, BPCL and HPCL, could face substantially higher procurement costs if Gulf shipments become more expensive.

Diversification offers only partial protection

Over the past several years, New Delhi has reduced some of its exposure to Gulf disruptions by increasing purchases of discounted Russian crude transported through alternative maritime routes.

However, energy experts note that diversification only reduces India's vulnerability rather than eliminating it entirely. Gulf producers continue to remain among India's largest suppliers of crude oil, while Qatari LNG remains difficult to replace quickly.

The attacks on the Mombasa and Al Bahiyah have also highlighted another area of Indian vulnerability.

Indian nationals make up a significant share of merchant shipping crews operating in the Gulf. The death of one Indian sailor and injuries to six others demonstrate the personal risks Indian seafarers face as the region becomes increasingly militarised.

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With inputs from agencies