U.S. Treasury sanctions Persian Gulf Strait Authority over Strait of Hormuz toll scheme

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Highlights

The U.S. Department of the Treasury designated the Persian Gulf Strait Authority for supporting the IRGC and running an extortion-based Strait of Hormuz toll scheme.
Sanctions block all U.S.-held assets of the Authority, restrict transactions by U.S. persons, and extend blocking rules to entities owned at least 50% by sanctioned parties.
Foreign financial institutions risk secondary sanctions for knowingly facilitating major transactions for the designated entity, expanding compliance risks for global shipping and finance sectors.

Sanctions target Strait of Hormuz toll network

As reported by the U.S. Department of the Treasury, the Office of Foreign Assets Control has designated Iran’s so-called Persian Gulf Strait Authority under Executive Order 13224, saying the body materially supports the Islamic Revolutionary Guard Corps, or IRGC. Treasury says the authority is part of an Iranian-controlled scheme to impose illegitimate tolls on vessels passing through the Strait of Hormuz and to force ships to provide information and follow Iranian routing instructions in exchange for safe passage.

Treasury says the authority works with the IRGC and the IRGC Navy to coordinate vessel traffic through the waterway, including directing ships toward an Iranian-designated route near the country’s coast while charging fees for transit. U.S. Treasury Secretary Scott Bessent says the action reflects Washington’s broader "Economic Fury" campaign and argues Iran is trying to monetize state-sponsored terrorism through maritime extortion.

Compliance risks expand for shipping and finance

Under the sanctions action, all property and interests in property of the designated entity that are in the United States or held by U.S. persons are blocked and must be reported to OFAC. Treasury also says entities owned 50% or more by blocked persons are themselves blocked, while U.S. persons are generally barred from transactions involving those interests unless authorized or exempt.

The department warns that civil or criminal penalties can apply to U.S. and foreign persons for sanctions violations, and that foreign financial institutions may face secondary sanctions if they knowingly facilitate significant transactions for designated parties. Treasury says the action builds on earlier guidance warning against complying with Iranian demands tied to passage through the Strait of Hormuz, including toll payments in fiat currency, digital assets, offsets, informal swaps, charitable donations, or the provision of sensitive vessel information.

Our earlier report examined how markets reacted to signals of a possible temporary U.S.-Iran agreement, with oil prices easing as investors priced in a lower geopolitical risk premium. It also underscored the Strait of Hormuz as a crucial chokepoint for oil flows and global trade, while noting that uncertainty remained over whether any deal would be finalized.

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