TEHRAN — Iran’s Deputy Parliament Speaker Hamidreza Hajibabaei announced on April 23 that the first revenues collected under the Strait of Hormuz transit toll have been deposited into the Central Bank of Iran, ending 36 days in which the scheme had collected nothing. The Central Bank confirmed the deposit was received in cash foreign currency, not cryptocurrency, contradicting earlier Bloomberg reporting that yuan via Kunlun Bank and USDT on Tron had been the operative payment rails.
The deposit converts a coercive instrument into a fiscal one. Until April 23, the toll functioned as pressure; from April 23, it funds a budget line, and the IRGC now has a bureaucratic interest — not only a strategic interest — in keeping the corridor under its control.
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What Hajibabaei Confirmed
Hajibabaei, addressing parliament on April 23, said: “The first revenue received from tolls in the Strait of Hormuz has been transferred to the Central Bank’s account.” The statement, carried first by Fars News Agency and amplified by ZeroHedge the same day, did not disclose the aggregate amount, the currency mix, or the number of vessels covered by the deposit.
MP Alireza Salimi, speaking to Tasnim News Agency on the same date, described the toll structure as variable: “The amount collected from each ship depends on its cargo and level of risk they pose.” That language matches the rate sheet circulated to shipping agents in March — roughly $1 per barrel of crude cargo, producing approximately $2 million per fully loaded VLCC at 2 million barrels.
The 36-day collection lag is the more striking number. Iran International had reported on April 16 that the toll regime, operational since IRGC began its informal Larak Island corridor on March 13, had issued only about 60 transit permits, generated payment requests for just 8 shipments, and banked nothing. SNSC Secretary Zolghadr was reportedly facing internal removal calls over the failure. Lloyd’s List Intelligence counted only 26 vessel transits routed through the IRGC-approved Larak channel in the same period.
Hajibabaei returned to the theme on April 26, telling Tasnim: “We have control over this Strait. We are not engaged in negotiations — rather, we are making demands.” The shift from collection failure to revenue claim happened in three days.
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Why “Cash, Not Crypto” Matters
The Central Bank, quoted by PressTV and Seoul Economic Daily on April 23-24, took the unusual step of denying the cryptocurrency angle directly: “Some media outlets have speculated that this money will be received in cryptocurrency, but this is not true. It was deposited in cash form.”
The denial points at Bloomberg’s April 1 report, which had described shipping agents paying in Chinese yuan settled through Kunlun Bank and CIPS, with a parallel USDT-on-Tron channel routed through Iranian intermediaries. Both methods have one feature in common: they sit outside the conventional dollar-clearing system that OFAC can sanction.
Cash foreign currency does not. A USD or EUR-denominated cash deposit at the Central Bank — even if physically transported in suitcases via Mehrabad — eventually intersects an OFAC-monitored correspondent relationship if the funds are to be deployed beyond Iran’s domestic economy. The Central Bank’s framing therefore creates two costs at once: it denies the crypto framing that would have allowed plausible deniability about Treasury exposure, and it implicitly tells shipping agents that yuan-only payments are not the channel parliament wants celebrated.
The currency denomination of the deposit was not disclosed. The omission is itself a data point. If the deposit were rials — as the April 21 sovereignty law requires — Hajibabaei would have said so. He did not.
Can Araghchi Still Offer Hormuz “Fully Open”?
Iran’s Foreign Minister Abbas Araghchi posted on X on April 17 that the Strait of Hormuz was “completely open.” Within hours, IRGC-aligned outlets Tasnim, Fars and Mehr attacked the tweet. Lawmaker Hossein Mahmoudi raised impeachment. Six days later, the same Fars News Agency that had attacked Araghchi’s framing carried Hajibabaei’s announcement that revenue from the contradicting toll regime had been banked.
The Institute for the Study of War, in an April 18-23 series of assessments, observed: “The IRGC appears to be controlling Iranian decision-making instead of Iranian political officials who are engaging with the United States in negotiations, particularly Foreign Affairs Minister Abbas Araghchi.” Three days after the ISW assessment, parliament celebrated the deposit.
This reproduces the same authorization-ceiling pattern documented after the Vance-Ghalibaf Islamabad bilateral: Araghchi can negotiate, and the IRGC can override the negotiation by fact rather than by veto. A Foreign Minister cannot credibly offer free transit when his Deputy Parliament Speaker has just posted the receipt for the toll to social media.
“All ships passing through this route must pay tolls in Iranian rials to the Iranian nation as a rightful fee for using Iran’s territorial waters.”— Hamidreza Hajibabaei, Deputy Parliament Speaker, Fars News Agency, April 23, 2026
Mohammad Reza Aref, Iran’s First Vice President, gave Al Jazeera the political framing on April 23: “One cannot restrict Iran’s oil exports while expecting free security for others.” The structure is reciprocal — the toll exists because sanctions exist — and that linkage means lifting sanctions is now the prerequisite for ending the toll. Lifting sanctions is precisely what the Witkoff 45-day framework defers to Phase 2.
From Coercion to Budget Line
The IRGC’s FY2026 budget allocation rose 24% year-on-year to approximately $2.5 billion, roughly one-quarter of Iran’s $10 billion declared military and security spending. The toll revenue, even at modest volumes, alters the budgetary mathematics in a way pure coercion does not.
Umud Shokri of George Mason University, in an April 14 interview with Iran International, sized the realistic ceiling: toll revenue “closer to $1-2 billion a year, even under optimistic assumptions.” That estimate was issued before the first deposit had been confirmed. A $1-2 billion annual run rate sits between 40% and 80% of the IRGC’s declared FY2026 envelope.
The fiscal arithmetic for shippers tells the corresponding story from the demand side. Hormuztoll.com data published April 23 puts the total cost stack per VLCC transit above the January 2026 baseline at $6 to $10 million: war risk insurance approximately $1 million, freight rate uplift $4-6 million, the Iran toll itself approximately $2 million, demurrage $500,000 to $1 million, and combined P&I, crew and cargo at $300,000 to $500,000. The toll is the third largest component but the only one that converts directly to Iranian state revenue.
| Cost Component (per VLCC transit) | USD Value | Recipient |
|---|---|---|
| War risk insurance premium | ~$1,000,000 | London/Lloyd’s syndicates |
| Freight rate uplift over baseline | $4-6 million | Tanker owner/operator |
| Iran transit toll | ~$2,000,000 | Iranian Central Bank |
| Demurrage (delays/clearance) | $500,000-$1,000,000 | Charterer absorbs |
| P&I, crew, cargo coverage | $300,000-$500,000 | Mutual associations |
| Total above January 2026 baseline | $6-10 million | — |
Brent settled at $105.33 per barrel on April 25 — about 50% above the pre-conflict baseline. At that price, Iranian crude exports clear roughly $4 million per million barrels above pre-war revenue, even before toll receipts. The combination is what converts the IRGC interest in the corridor from operational to institutional.
Iranian state media has framed the toll as reconstruction financing. Officials cite $270 billion in war damages and the April 21 parliament law conditions transit denial on whether the flag state has “caused damage” to Iran until compensation is paid. That construction names the toll as reparations. Reparations have a recipient, and the recipient now exists at the Central Bank.
Russia Exempt as “Friendly Nation”
Iranian Ambassador to Moscow Kazem Jalali told IranWire on April 24 that Russia “is striving to apply this exception to friendly countries such as Russia.” The statement confirmed what Russian-flagged tonnage operators had inferred from transit data: Russian vessels are not paying.
The exemption is structurally consequential. Russia is the second-largest crude exporter through Hormuz-adjacent waters via Black Sea-to-Asia routings and uses transshipment lanes Iran can affect. By exempting Moscow, Tehran has converted the toll from a universal sovereignty claim into a bilateral political instrument — one that distinguishes friend from non-friend by ledger entry.
The toll also exempts vessels Iran cannot afford to alienate. China’s CNPC and Sinopec, which together hold approximately 8 MTPA of contracted Qatari LNG offtake and 5% equity in the North Field East expansion, are not on a published exemption list, but the Larak corridor data documented during the Al Daayen transit showed Chinese-flagged tonnage clearing without IRGC challenge. The exemption pattern is friendly-nation discretionary, not rule-bound.
Aimen Dean, the former MI6 operative, told The National on April 23 that Iran was now seeking “security oversight jurisdiction over the entire strait.” That phrase — security oversight — is what an exemption regime requires. A non-discriminatory toll generates revenue. A discriminatory toll generates leverage. Iran is running both.
Is the Toll Legal Under International Law?
IMO Secretary General Arsenio Dominguez gave WorldCargoNews the categorical answer on April 9: “There is no international agreement where tolls can be introduced for transiting international straits.” He called the precedent “dangerous.”
UNCLOS Article 26 prohibits charges levied on foreign ships “merely for passing through” international straits. Articles 38 and 44 establish unrestricted transit passage rights. The text is unambiguous. The enforcement mechanism is not.
Iran has not ratified UNCLOS. The compulsory arbitration provisions therefore do not apply. The remaining route — UN Security Council action — is blocked by Russia and China, both of which have either accepted Iranian exemption (Russia) or de facto exemption (China) and have no interest in voting against a regime that benefits their own carriers. The IMO can issue circulars; it cannot fine.
The April 21 parliament “Law on Establishing Iranian Sovereignty over the Strait of Hormuz” requires IRGC permission for transit, payment in Iranian rial, and denial of transit to countries deemed hostile. The rial-payment clause and the cash-foreign-currency Central Bank deposit are already in tension. The hostile-country denial clause has been operationalized through ship seizure rather than rejection at the toll booth: on April 22, Iran seized the Panama-flagged container ship MSC Francesca (11,660 TEU) and the Liberia-flagged, Greek-owned Epaminondas (6,690 TEU), and fired on the Euphoria, which escaped to UAE waters, according to Al Jazeera reporting on April 23.
Ali Vaez of the International Crisis Group described the dynamic to Al Jazeera as “mutual brinkmanship, with each side testing the limits of coercion,” with “every incident at sea a potential trigger for wider escalation.” The seizures and the deposit confirmation occurred within 24 hours of each other.
Background: The 41 Days Before the Deposit
The IRGC began its informal toll booth on March 13, requiring vessels to submit IMO number, cargo manifest, crew nationals, ownership chain and destination 72 to 96 hours before a Larak Island corridor transit. Bloomberg reported on April 1 that yuan and USDT payments had begun; both were limited.
The 12-article formal sovereignty bill was introduced in parliament April 4-6. The IMO condemnation followed on April 9. Iran International’s April 16 reporting confirmed zero collection. Parliament passed the sovereignty law on April 21. The MSC Francesca and Epaminondas seizures came on April 22. The Central Bank deposit was announced on April 23. Russia’s exemption was confirmed on April 24.
Total commercial transits through Hormuz since the April 8 ceasefire have run at approximately 45 ships, or 3.6% of the pre-war baseline, according to Bloomberg’s April 26 reporting on the double blockade structure. The structure now combines US Navy interception of Iran-bound or toll-paying vessels in the Arabian Sea with IRGC interception of non-permitted vessels in the Gulf of Oman. Vessels need both approvals to transit.
The March 4 IRGC declaration of the Hormuz Traffic Separation Scheme as a danger zone remains operative. Vessels that decline to use the Larak corridor risk both kinetic threat from the IRGC and US Navy escort denial. The toll is nominally $1 per barrel, structurally $6-10 million per VLCC, and operationally the only legal channel.
The Dallas Fed’s August 2026 timeline for restored throughput now sits against a Central Bank deposit that has institutionalized the very mechanism keeping flow there. The same Iran that needs sanctions relief to access banked toll revenue is the Iran that benefits from keeping the toll in place. The contradiction is structural.
The pattern parallels the model Iran is exporting to its proxies. The Houthi Red Sea toll architecture, built with Iranian technical assistance through 2025-2026, replicates the Larak corridor’s risk-graduated rate sheet, exemption regime, and IMO-defying legal posture. The Iranian Central Bank deposit makes the model exportable: it has now passed the proof-of-concept threshold of revenue confirmation.
Frequently Asked Questions
How was the cash physically delivered to the Central Bank?
Hajibabaei did not disclose the courier mechanism. Iran’s parallel-market hawala networks operate between Bandar Abbas, Dubai’s Deira gold souk, and Tehran’s Ferdowsi Street currency exchange district, and have historically settled trade flows in physical USD and EUR notes, gold bullion and euro-denominated bearer instruments. The 36-day lag between toll inception and first deposit is consistent with hawala batch settlement rather than wire transfer; conventional banking would have generated either instant deposits or none at all.
Why does the Central Bank’s denial of cryptocurrency matter to OFAC?
OFAC enforcement reach depends on a clear chain to dollar-denominated correspondent banking. Cryptocurrency settlements via Tron and Bitcoin can be sanctioned individually, but only after on-chain analytics identify the wallets — a process that typically lags transactions by months. Cash foreign currency, by contrast, has to enter a correspondent banking system to fund anything beyond Iran’s domestic economy. The Central Bank’s “cash, not crypto” framing therefore tells Treasury that the funds will become traceable the moment Iran tries to deploy them, which raises the prospect of secondary sanctions on any bank that accepts an onward transfer.
Has Iran disclosed how toll revenue will be spent?
Hajibabaei has not. The April 21 parliament law cites reconstruction financing and references the official $270 billion war damage estimate, but it does not specify line items or oversight. The IRGC budget rose 24% year-on-year for FY2026 before the deposit was confirmed; whether toll revenue is treated as supplementary IRGC funding, general treasury revenue, or a hypothecated reconstruction fund has not been published.
What happens if Saudi Arabia or the UAE refuses to pay the toll?
Saudi Arabia routes the bulk of its current crude exports via the East-West Pipeline to Yanbu rather than through Hormuz, which removes most Saudi tankers from the toll’s reach but caps export volume at the pipeline ceiling of approximately 5.9 million barrels per day against a pre-war Hormuz throughput of 7-7.5 million. The UAE has no equivalent bypass and its Fujairah terminal lies inside the Strait. UAE-flagged vessels not paying the toll have so far been rerouted, escorted by the US Navy under the double-blockade arrangement, or held outside Iranian-claimed waters until challenged. A formal UAE refusal has not been issued; the Euphoria firing on April 22 is the only documented kinetic incident involving a vessel reaching UAE waters without Iranian permission.
What would unwind the toll regime now that revenue has been banked?
The structural answer is sanctions relief, since First Vice President Aref has publicly linked the toll to oil-export restrictions. The political answer is harder. The IRGC institutional interest in the toll is now budgetary, and reversing a budget line requires either a Khamenei directive — Khamenei has been absent from public view for more than 50 days — or an SNSC vote in which Vahidi has demonstrated capacity to block. The Witkoff 45-day framework defers Hormuz to Phase 2; without a Phase 1 lift on sanctions, neither side has the structural incentive to dismantle what is now a working revenue mechanism.
