Iran Formally Establishes 'Persian Gulf Strait Authority,' Declaring Transit Without Permission Illegal

On May 5, 2026, the Islamic Republic of Iran formally activated the Persian Gulf Strait Authority (PGSA), a new government agency designed to transform military control of the world's most critical energy chokepoint into a permanent administrative toll system. The move requires commercial vessels to apply for transit permits and pay fees—often routed through cryptocurrency to evade Western financial networks—in exchange for safe passage through the Strait of Hormuz.[1][6]

The establishment of the PGSA represents a strategic shift by Tehran, moving from wartime physical blockades to institutionalized regulatory control. By charging tolls for transiting the international waterway, the Islamic Revolutionary Guard Corps (IRGC) guarantees ships will not be openly attacked. As of early June, over 300 shipping companies had already applied for permits, primarily those servicing Asian destinations such as China, India, and the United Arab Emirates.[1]

The United States has aggressively rejected the new framework. The US Treasury's Office of Foreign Assets Control (OFAC) sanctioned the PGSA shortly after its creation, characterizing it as a mechanism for the IRGC to extract revenue through state-sponsored coercion. Treasury Secretary Scott Bessent warned that the Trump administration is preparing unprecedented economic isolation measures against Tehran to break its grip on the corridor.[2][6]

Despite US pressure and a naval blockade that has redirected at least 62 commercial vessels, Iranian officials maintain that their control over the strait is absolute. Rear Admiral Ali Ozmaei, commander of the IRGC Navy, stated that no movement escapes Iranian forces and that the strait remains closed to unauthorized traffic.[2][4]

The diplomatic clash escalated further in mid-August when US President Donald Trump claimed on social media that the United States had "total control" over the Strait of Hormuz, describing the US naval presence as a "wall of steel."[3]

Iranian military officials swiftly dismissed the US president's claims as fabrications. Ebrahim Zolfaghari, spokesperson for Iran's central military command, asserted that no commercial ship or tanker has the possibility of safe passage without the direct permission and supervision of Iranian armed forces.[3]

Concurrently, Iran's parliament advanced a strategic action plan designed to formally bar vessels and equipment belonging to the US, Israel, and other designated hostile nations from passing through the waterway. Valiullah Bayati, a spokesperson for the parliament's internal affairs committee, confirmed that the general outline of the plan had been approved.[2]

Amid the standoff, regional diplomacy has yielded a parallel track. Iranian Foreign Ministry spokesman Esmaeil Baghaei announced that Tehran and Muscat have reached an agreement on a shipping route map for the Strait of Hormuz following weeks of technical negotiations.[4][5]

The Iran-Oman arrangement aims to establish safe navigation routes while preserving the sovereignty of both coastal states. However, Baghaei emphasized that the full restoration of security and the resumption of normal commercial shipping depend entirely on the lifting of the US naval blockade and an end to what Tehran describes as illegal US military threats.[4][5]

The global shipping industry now faces a fractured maritime environment. With 20 percent of the world's oil supply dependent on the Strait of Hormuz, the competing frameworks—Iran's PGSA toll system and the US-led naval deterrence—force operators to navigate not only physical risks but also severe legal and financial liabilities.[1][2]