On May 1, the U.S. Department of the Treasury cautioned that any party making payments to Iran in exchange for guarantees of safe passage through the Strait of Hormuz is exposed to potential punitive sanctions. The advisory, issued by the Office of Foreign Assets Control (OFAC), emphasizes that the sanctions risk applies regardless of how the payment is structured.
The Strait of Hormuz serves as a critical maritime chokepoint, carrying roughly 20% of global seaborne crude oil and liquefied natural gas flows. In recent diplomatic exchanges, Tehran has proposed imposing fees or tolls on vessels transiting the Strait as part of a package aimed at ending the war with Israel and the United States. OFAC says it is aware of Iranian threats to shipping and of demands for payments in return for safe passage.
According to the advisory, demands for payment may take many forms. OFAC lists potential channels including conventional fiat currency, digital assets, offsets, informal swaps, and other in-kind transfers. The agency specifically calls out nominally charitable donations made to organizations such as the Iranian Red Crescent Society, Bonyad Mostazafan, or transfers routed to Iranian embassy accounts as possible methods being used or solicited.
OFAC stated that the alert is intended to warn both U.S. and non-U.S. persons about the sanctions exposures associated with making these payments to, or seeking guarantees from, the Iranian regime for safe passage through the Strait. The advisory underscores that these exposures persist regardless of the payment method chosen.
The advisory was released as Iran transmitted its latest negotiation proposal to Pakistani mediators, an action that officials said could affect prospects for breaking the current impasse in efforts to end the Iran war. OFAC did not provide additional details on enforcement actions in the advisory, but reiterated the broad applicability of sanctions risk tied to such payments.
Key points
- OFAC warned on May 1 that payments to Iran for safe passage through the Strait of Hormuz may trigger sanctions.
- The Strait carries about 20% of global seaborne crude oil and liquefied natural gas flows, highlighting the waterway's strategic importance.
- Payment methods that may raise sanctions concerns include fiat, digital assets, offsets, informal swaps, in-kind payments, and donations to named Iranian entities.
Risks and uncertainties
- Sanctions exposure for U.S. and non-U.S. persons making any form of payment to Iran tied to safe passage - impacts shipping and financial sectors.
- Uncertainty over how demands for payment will be presented or enforced by Iranian authorities - impacts maritime operators and energy transporters.
- Ongoing diplomatic negotiations, including Iran's submission of a new proposal to Pakistani mediators, leave outcomes unpredictable - impacts geopolitical risk assessment for energy markets.