Donald Gainsborough is a seasoned architect of policy and a leading voice in global legislation, currently serving at the helm of Government Curated. With a career defined by navigating the complex intersections of international law and sovereign interests, Gainsborough brings a sharp, analytical eye to the shifting tides of maritime security. Today, we explore the escalating crisis in the Strait of Hormuz, where the proposed implementation of transit tolls by regional powers threatens to dismantle decades of established seafaring norms. Our conversation covers the economic anxieties of the global shipping industry, the precarious legal standing of these new “service fees,” the severe impact on Asian energy markets, and the harrowing human cost for the thousands of seafarers caught in the crosshairs of this geopolitical standoff.
With the establishment of the Persian Gulf Strait Authority and the potential for compulsory transit fees, how would these measures fundamentally reshape the economics of global shipping and trade?
This move represents a seismic shift that moves us away from the tradition of free passage and toward a “pay-to-play” model for the world’s most critical waterways. By formalizing the Persian Gulf Strait Authority, Tehran is essentially attempting to monetize a chokepoint that handles a massive portion of the world’s energy, which eight of the largest shipping associations warn will cause immediate financial harm. These compulsory charges are viewed by the industry as a toll in all but name, creating a precedent that could encourage other nations to hold global trade hostage for local revenue. Beyond the direct costs to shipowners, we are looking at a permanent increase in the price of energy and a spike in inflation that will eventually be felt by every consumer. It is a dangerous departure from international practice that turns a global common into a private revenue stream, undermining the very foundation of maritime governance.
The International Maritime Organization has been vocal about the illegality of these tolls, yet the situation on the water remains volatile. Why is the legal framework governing these straits so vital to global stability?
The legal framework, specifically the right of transit passage, is the only thing preventing our oceans from becoming a patchwork of disconnected and expensive fiefdoms. Arsenio Dominguez, the head of the UN’s maritime agency, has been explicit that countries simply do not have the right to introduce tolls or charges on these international straits. If we allow these rights to be compromised or used as chips in broader political negotiations, we lose the predictability that the global economy relies upon to function. We have already seen the physical consequences of this breakdown, with the IMO confirming 64 incidents and 17 deaths in the region since the conflict began. When international law is ignored, the resulting vacuum is filled by uncertainty and violence, making the simple act of transporting goods a life-threatening endeavor.
The economic ripple effects of these disruptions seem particularly concentrated in certain regions. How do you foresee this affecting the industrial and social stability of Asian markets?
Asia is the primary destination for the bulk of the Gulf’s energy exports, which puts the continent squarely in the path of this economic storm. We are already seeing the cost increases manifest in very specific and damaging ways, such as the skyrocketing price of fertilizers and significant shortages of diesel fuel. While some oil might be diverted through overland pipelines, natural gas remains incredibly vulnerable because it cannot be easily rerouted away from this specific chokepoint. If these tolls or disruptions were to extend to container shipping or bulk carriers, the cost of plastics and manufactured goods across Asia would become unsustainable. This isn’t just a matter of corporate profits; it’s about the basic ability of nations to power their industries and feed their populations without facing crippling price hikes.
Beyond the high-level policy debates, there is a significant humanitarian crisis unfolding for those actually operating the vessels. What is the current reality for the thousands of seafarers navigating these waters?
The human cost of this conflict is staggering, with at least 6,000 seafarers currently stranded in and around the strait as of late July. These individuals are living in a state of constant high alert, exemplified by the tanker that reported hearing two explosions while transiting the waterway just this past Wednesday. They are the collateral damage of a geopolitical chess match, facing the very real threat of becoming one of the tragic statistics reported by the UN Human Rights Chief. It is impossible to maintain a functional global trade system when the people who power it are treated as expendable or are subjected to “toll booth” diplomacy. Every day these seafarers spend in the strait is a day they spend under the shadow of Iranian forces, who have used their ability to launch attacks as a way to gain leverage in international negotiations.
Given that international organizations like the UN and the IMO have limited physical leverage, what is the likelihood of a major power intervention to restore the status quo?
The reality is that neither the UN nor the various shipowners’ associations have the adequate leverage to change the calculus of a resilient and stubborn Iran. While the United States possesses the military means to use violence to coerce a change in behavior, there is a significant amount of uncertainty regarding the political will to do so. If the American leadership remains ambivalent about enforcing freedom of navigation, it leaves the door wide open for Iran and Oman to finalize their deal and manage the waterway as they see fit. Without a unified and forceful international response, Tehran will continue to use its effective control over the strait as a powerful tool to extract concessions. We are at a crossroads where the absence of a clear protector of international law might lead to the permanent erosion of free navigation in the region.
What is your forecast for the future of the Strait of Hormuz?
I forecast that the “toll booth” model will likely become a semi-permanent reality, leading to a long-term restructuring of global energy routes. Unless there is a decisive shift in the geopolitical stance of major powers, Iran will successfully use the Persian Gulf Strait Authority to normalize these fees, which will permanently bake higher costs into the global supply chain. We should expect to see shipping companies increasingly factoring in “security premiums,” and we will likely see a continued fragmentation of international maritime law as other nations observe the success of this coercion. The era of the Strait of Hormuz being a reliable, free-to-transit gateway is closing, replaced by a period of chronic instability and localized economic hardship, particularly across the energy-dependent economies of Asia.
