[roncesvalles]

1. $2MM is their initial demand, expect it to be negotiated down.

2. There is a lot of missing details. Most ships transiting the Hormuz are Asian. Will Iran also charge China, their ally, or will they get a discount? And countries like Pakistan and India who have been neutral to slightly Iran-leaning? Can the US even "sign" such an agreement on behalf of the world? As far as non-parties to the conflict are concerned, Iran's toll is literal highway robbery.

3. "Lifting all sanctions" is again Iran's initial negotiating position. Most likely, the final agreement will keep some sanctions.

[henrikschroder]

> As far as non-parties to the conflict are concerned, Iran's toll is literal highway robbery.

Yes.

But before the US started this stupid war, everyone knew that Iran had strategic control over the strait, and Iran reasoned that if they were to impose a toll on ships passing the strait, the rest of the world would gang up and bomb the shit out of them, removing their strategic control of the strait. So it was kept open.

But now the US went in and bombed the shit out of them anyway, whereupon Iran discovered that despite that, the US wasn't able to secure the strait. What they previously feared turned out to be manageable. They can close the strait, and the cost of stopping them is much, much higher than the US, or any other country wants to bear.

So the rest of the world is choosing between joining the US' illegal fiasco of a war in Iran to help open the strait, or simply paying the comparably tiny toll the Iranians are asking for, in return for oil shipments resuming immediately. So far, everyone is choosing #2.

As a bonus, Iran has also discovered that they can break through the defences of the other gulf states and legitimately threaten their oil facilities, desalination plants, and other infrastructure. Previously, the mostly US-supplied missile defences they had was assumed to be 100% effective, but by testing it, Iran now knows that they're not.

And all of this because the US, in its hubris and arrogance, assumed Iran was as defenceless and vulnerable as Venezuela, and that it would work out splendidly like that time. Idiocy.

[iugtmkbdfil834]

<< And all of this because the US, in its hubris and arrogance, assumed Iran was as defenceless and vulnerable as Venezuela, and that it would work out splendidly like that time. Idiocy.

This. It is hard to express the level of exasperation past few week brought. The move left US in a notably worse strategic position than when it began.

[roncesvalles]

Just because there are no worthwhile violent means by which to stop Iran from putting a toll booth in international waters doesn't mean that it can do it at no cost.

Doing this is going to make Iran a global pariah and piss off its only ally, China, who has to pay 70% of the toll (ostensibly, unless they cut a deal).

[fatbird]

$2m is the current toll that Iran has already successfully charged any ships it allows. It amounts to an extra $1/barrel, so it's a trivial tax in comparison to what the supply shock is causing in fluctuations. China has already paid, and will happily pay going forward if it stabilizes the supply chain.

Expect it to go higher as negotiations cement Iran's highway robbery. Which, yes, it is highway robbery, but it's robbery no one is able to stop without invading and occupying Iran to execute proper regime change... which no one, least of all the US, is stepping up to do.

The U.S. has lost all negotiating leverage. It's been demonstrated that they're unable to militarily impose their will on Iran, and they're far more sensitive to economic disruption than Iranians are--who are, as I type this, forming human shield rings around vital bridges and facilities, ready to die if the U.S. bombs them. Negotiations are, at this point, about the U.S. coming away with some face-saving outcomes.

[roncesvalles]

They're happily paying it because it is a wartime toll.

Consider also the renewed impetus for pipelines on the Arabian peninsula to bypass the strait.

Consider that China has now recognized this as a point of weakness and will be finding ways to reduce or eliminate their exposure.

There is only one permanent solution to blackmail. Shelling out the extortion money is only a temporary one. Blockading international waters is super illegal.

[seanmcdirmid]

> Consider that China has now recognized this as a point of weakness and will be finding ways to reduce or eliminate their exposure.

China has always seen its need to import oil as a weakness and has been working on solutions to that, solutions it is now very happy to export to other countries that now recognize the threat as well. This war is a huge boon to China which probably helped it avert a recession that was otherwise going to happen this year or next.

The only real shocker is that the USA (well, the MAGA crowd) refuse to see this as a weakness. We have a way to literally make the Middle East irrelevant, and yet we’ve decided to pull back on our anemic (in comparison to China) efforts in moving in that direction.

[Gud]

Willing or not, the Hormuz toll will be paid for many years to come.

Thanks, Donald. https://en.wikipedia.org/wiki/Sound_Dues

[fakedang]

There are already pipelines in the Arabian Peninsula. None of those help - on the contrary, they are more vulnerable than tankers. The Houthis have already targeted the Saudi pipelines in the past.

The only possible solution would be underground pipelines but a.) sunk costs into existing pipelines, b.) capex needed is much higher, c.) you can't transport all of the oil and gas, or even a significant fraction of it through standard sized pipelines.

Saudi Arabia will invest into a port on the Jeddah side, that's for certain.

[ifwinterco]

China has understood their dependency on seaborne oil for years and been actively working to mitigate it with EVs etc. Their electricity mix is coal, renewables and nuclear with not a lot of natural gas.

International law doesn't really exist and if it did, the US and particularly Israel have committed far worse violations (including the most taboo one of all, genocide). Redrawing some borders on a nautical chart by force is minor in comparison

[felixgallo]

So is declaring that you won't abide by the Geneva Conventions, targeting civilian infrastructure and double tapping a girls' school, but here we are at the logical conclusion of the dumbest war in centuries.

[bambax]

Another question is, how is Iran going to enforce this?

It doesn't seem Iran still has a navy that could board ships and force them to stop without actual violence.

What happens if a tanker decides to not pay and chance it? Will Iran sink it? That would constitute an act of war (a reprise of the war). Hard to pull off politically (even if it's easy to do technically).