The Toll Nobody Could Pay
Published 4 October 2026
The memorandum's fifth point asked Iran to use "best efforts" to arrange safe commercial passage through Hormuz with no charge for 60 days, with traffic starting at once and restored within 30. Read it twice and the hedges stand out: best efforts, allowing for technical and military obstacles, demining. The text Reuters reproduced promised a direction of travel, not a date on which a tanker owner could sleep.
A tanker does not sail on a clause. It sails on three permissions: the navy lets it through, the bank lets the money move, and the insurer lets it be covered. This chapter is about the second and third, because they moved on different clocks from the diplomats.
The licences that opened and closed
Washington's sanctions office writes its decisions down, which makes the sequence checkable. On 20 March it issued General License U, authorizing delivery and sale of Iranian-origin crude and petroleum products already loaded on vessels as of that date. That was relief for cargo already afloat, not a reopening of Iranian trade.
Then came the June memorandum. A licence dated 21 June and announced on 22 June, General License X, authorized production, delivery and sale of Iranian-origin crude, petrochemicals and petroleum products through 21 August. It is the implementation evidence for the memorandum's oil-waiver promise, and it is separate from the memorandum's wording itself.
It lasted just over two weeks. On 7 July the sanctions office revoked General License X and replaced it with X1, explicitly framed as a wind-down of the June authorization. That is a dated primary record. It is a different event from the president's remark on 8 July that the deal was over, and this file keeps them apart: one is a legal notice, the other is a statement.
The alert that targeted the toll booth
Meanwhile, a second problem was growing at the strait itself. The sanctions office's updated Hormuz passage alert, revised on 24 August, warns US and non-US persons about sanctions exposure from payments, guarantees, insurance or services, and even information demands, involving three named entities: the Persian Gulf Strait Authority, the Persian Gulf Marine Insurance Company and HormuzSafe. The alert dates the first designation to 27 May and the other two to 29 July. Its original version was issued on 1 May, so the 24 August text is an update, not a new notice.
The alert says exposure can arise even without a payment, and it lists structures from fiat and crypto to swaps and in-kind arrangements. A related published FAQ sits alongside it. For a shipowner, bank or insurer anywhere that touches the dollar system, that is a second barrier beyond physical danger and price. It is a statement of US regulatory exposure. It is not a finding that Iran has a lawful right to levy tolls, and it does not say every transaction by every Indian company is automatically prohibited.
What cover cost, and what it did not
Insurance is where the strait's mood gets a price. The dated quotes below come from different reports, different people and different denominators, so they are listed rather than chained into a trend.
- 6 March. Reuters reported hull war-risk quotes of around 1 to 1.5 percent of hull value, with one 3 percent example set against 0.25 percent before the war. These were examples, not a market-wide tariff.
- 25 June. Insurance Business, relaying broker reporting, put hull war premiums falling from roughly 5 percent to 2 percent after discounts following the June agreement. The cargo rate was described as broadly flat.
- 8 July. Reuters, citing anonymous industry sources, reported hull rates moving toward 3 percent from 2 percent a week earlier. One underwriter suggested cover at 5 percent or more. That was a single indication, not a blended rate.
- 9 September. Reuters quoted ENOC's Paul Bradshaw on cargo cover of up to 5 to 6 percent, additional war risk of up to 10 percent of cargo value, and transit costs of $10 million to $20 million. He described upper-end experiences, not a standard rate.
Three cautions come with that list. Hull and cargo denominators are different things and are not added here. The September maxima are not summed, because a total premium needs a policy and a cargo value that no report supplies. And the July report adds a detail that explains the whole mood: typical war cover runs for seven days and is reviewed every 24 to 48 hours. A voyage through the strait is therefore priced on a rolling basis, and a bad night at sea can reprice the next morning.
The same week, two different clocks
The 8 July Reuters report also says some underwriters advised owners to pause Hormuz voyages after renewed attacks, while seeing no immediate sign that war cover had stopped altogether. The commercial barrier was the crew and the ship as much as the policy. An owner who can buy cover but cannot persuade a crew to sail has not solved anything.
That is the lesson of point 5. The memorandum set a 30-day clock for restoring traffic, and the licence that was meant to carry the oil trade lasted fewer than 20 days before its revocation on 7 July. The diplomats and the underwriters were reading from different calendars, and the underwriters were quicker.
Get the next file
One email when a new file is published. No paid service needed.