Why Iran Can’t Control the Strait of Hormuz: What It Means for SA

What happened

There has been some talk about Iran wanting to charge a toll or fee on ships passing through the Strait of Hormuz, a narrow waterway between the Persian Gulf and the Arabian Sea. Iran's interest in this comes from its desire to generate income and exercise control over a key global shipping route. However, experts say this idea wouldn’t work because the Strait of Hormuz is not a man-made canal that can be controlled or tolled in the same way.

Why it matters

The Strait of Hormuz is one of the world’s busiest shipping lanes, especially for oil exports. Around 20% of the world’s petroleum passes through it every day. Any attempt by Iran to block or charge for passage would have a big effect on global oil supply and prices.

For South Africa, which imports much of its crude oil and petroleum products, disruptions in the Strait of Hormuz could mean higher fuel prices and greater economic uncertainty. Businesses and consumers alike could feel the pinch if the cost of transportation and fuel rises due to instability in this crucial shipping route.

What this means for South Africans

South Africa imports a significant portion of its oil, much of which travels via the global shipping network through the Middle East and the long sea routes around Africa. If Iran were able to impose tolls or restrict movement through the Strait of Hormuz, the cost of fuel in South Africa might increase. This would affect everyday South Africans who rely on fuel for transport, electricity (where fuel is still part of the mix), and goods delivery.

Moreover, South African small businesses that depend on imported products or export goods by sea could face higher shipping costs or delays. While South Africa is geographically removed from this tension, the connectedness of global trade means we could feel the effects quite quickly.

Impact on consumers, jobs and small businesses

Higher fuel costs generally trickle down to higher prices for food, transport, and manufactured goods. For South African consumers already dealing with high living costs and inflation, this added pressure could mean tighter budgets and reduced spending power.

Small businesses, especially those involved in import and export, could see their operating costs rise. Increased shipping fees or supply chain delays might reduce profitability or even force some businesses to raise prices or cut back on staff.

Job seekers could feel these impacts indirectly if economic growth slows or businesses hold back on hiring due to increased operational expenses.

Risks and limitations

While the idea of Iran tolling ships in the Strait of Hormuz might sound threatening, it’s important to understand the limitations:

• International Law: The strait is an international waterway with laws ensuring the right of innocent passage for ships. Iran cannot legally block or charge all shipping traffic passing through.

• Naval Presence: Several countries, including the United States, have naval forces deployed in the region to ensure free navigation.

• Practicality: The strait is very narrow—only about 33 kilometres at its narrowest. Any attempt to impose tolls or restrictions would be challenged by the sheer volume of vessels and international stakeholders.

• Economic Impact on Iran: Restricting passage or imposing tolls could backfire on Iran, as it also depends on exporting oil and maintaining trading ties.

In summary, while Iran might express a wish to collect tolls or control the Strait of Hormuz, it is practically and legally very unlikely. However, the geopolitical tensions in the region mean risks remain for global trade, and by extension, South African consumers, businesses and workers.

Understanding these complexities helps South Africans make sense of international news and anticipate how global events can affect local economies and daily life.

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