Iran has confirmed what shipping executives and oil traders around three continents have already been factoring into their spreadsheets: Tehran will charge ships to pass through the Strait of Hormuz and is deliberately keeping the details of the levy vague. During his weekly press conference in Tehran on Monday, the Iranian foreign ministry spokesman Esmail Baghaei was directly questioned about whether transit charges had been discussed in Tehran's latest negotiations with Muscat on a new shipping route through the strait and if he would receive a cut. In reply he was very non-committal. These things we do not discuss at this level," he replied, and proceeded to give the more important answer: “Anyone who does provide maritime services, by that, by rule, has a right to be paid for them.”

That one sentence has caused more disruption to energy markets than most energy policy statements. The new route will cost Iran in the range of 5 to 7 percent of the value of the cargo, Reuters and Bloomberg reporting in recent days from Tehran make clear even if the spokesman doesn't let it be known this publicly. Oman, which is not a major player but is more of a broker and host, is believed to be pressing for 3 percent, which would be interpreted by Washington as an extortion racket disguised as a hostage charge. The difference between these two numbers is not a rounding error. The disparity between Iran's request and Oman's counter represents a few million dollars per trip for a $80 million crude tanker, which before the start of the war used to be the site of more than a hundred cruises per day.

All that "used to" is what it is. Once, about one-fifth of the world's seaborne oil and an equal amount of liquified natural gas transited this 21-mile strait between Iran and Oman. Fighting between Iran and the American-Israeli coalition started on Feb. 28 and since then that flow has been at a standstill, briefly revived during a truce in June, and again suspended following fresh attacks in July. Independent monitoring reported by maritime analysts reduced the number of daily transits to low double digits against a pre-war figure of well over a hundred and much of the traffic that moves is now under the protection of naval escorts or with the transponders turned off, making the actual situation more complex than the official data indicates.

The diplomatic damage has been surpassed by the economic damage. Around a quarter of one percent of the hull value of a large crude carrier before the war, war-risk insurance through Hormuz has been quoted at various times this year as high as 10 percent by underwriters in the UK and Lloyd's markets in the Gulf. That equates to a regular premium of about $250,000 on a $100 million tanker to cross the ocean, and it can easily push into the millions when the crossing is repeated. This led container lines such as Maersk, CMA CGM and Hapag-Lloyd to reroute Middle East services around the Cape of Good Hope months ago, increasing by some 4,000 nms and up to two weeks per voyage, industry estimates put the combined weekly cost of the diverted fleet at $40-50m in fuel, insurance and time. The price of Brent crude, which surged to over $130 a barrel in the opening weeks of the war, has tumbled back to the high teens and low eighties in recent weeks, with truce negotiations back and forth, and has risen again this week after the Hormuz standoff once again came to a head.

The importance of Baghaei's remarks isn't the fee itself, but the message it conveys about who will have a say in determining the conditions for reopening one of the global economy's most critical chokepoints. According to Tehran, Iran and Oman have already agreed on a temporary route, while Iranian traffic will flow through Iranian waters and Omani traffic will flow through a lane in Oman's waters, a development that will effectively eliminate the proposed Traffic Separation Scheme that has been in place for decades. Washington, meanwhile, has pointed out that its navy guards the southern route and that it doesn't want Iran to charge foreign vessels to use it, saying a smooth-running international waterway shouldn't be turned into an Iranian toll road under sanctions. But Iran's officials have their own counter argument: that a real reopening may not be possible until the ‘ongoing' American naval blockade is lifted, as is the wider military campaign, so the fee issue, as diplomatically worded as it is, is wrapped up in a much larger sovereignty, compensation and who owes what to who issue after five months of strikes.

The calculations for economies not closely tied to the Gulf are simple. Japan, South Korea and India account for a high percentage of their crude imports from the Gulf, which route supplies virtually all of their imports, and any small, sustained increase on top of already high insurance costs would be reflected in refined fuel prices, shipping terms and ultimately consumer inflation indexes in a group of countries with less interest in another price shock. Oil exporters on the Gulf side, on the other hand, have a narrower, but more acute problem: go along with the fee arrangement, which will cut into their own margins, or go against Washington and risk extending the very disruption that has already cost them billions in trade. The vagueness of Baghaei's remarks on Monday wasn't a mistake. It was Tehran that had all the cards on the table, and all the dollars, until it decides which lever does more for its depleted treasury.