U.S. Treasury Bans Payment of Strait of Hormuz Transit Fees to Iran

The administration of U.S. President Donald Trump has intensified its pressure on Iran. It has completely banned the payment of transit fees to Iran for the passage through the Strait of Hormuz, warning that even non-U.S. persons may be subject to sanctions.

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The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) responded “No” to the question of whether paying transit fees to Iran is permitted in the “Frequently Asked Questions (FAQ)” section on its website on April 28 (local time).

OFAC stated, “Paying money, either directly or indirectly, to the Iranian government or the Islamic Revolutionary Guard Corps (IRGC) to safely transit the Strait of Hormuz is not permitted for U.S. persons, including U.S. financial institutions, or foreign entities owned or controlled by U.S. persons.”

OFAC also noted, “Non-U.S. persons who make such payments may also be exposed to significant sanctions,” adding, “Specifically, foreign financial institutions and other non-U.S. persons may be designated as sanctions targets or may be exposed to sanctions risks if they engage in certain transactions or activities linked to other designated or blocked persons.”

On this day, OFAC also imposed large-scale additional sanctions targeting a ‘shadow financial network’ associated with sanctions evasion and Iran’s support for terrorism. It announced that it had designated 35 organizations and individuals as sanctions targets for managing Iran’s shadow financial structure and enabling the movement of funds worth tens of billions of dollars.

U.S. Treasury Secretary Scott Bessent said, “Iran’s shadow financial system enables activities that disrupt global trade and fuel violence across the Middle East, serving as a crucial financial lifeline for its military,” adding, “Financial institutions should be aware that facilitating or engaging with such networks carries the risk of paying a severe price.”

Additionally, OFAC has banned transactions with private, small-scale refineries (teapot refineries) in Shandong Province, China, which purchase most of Iran’s exported crude oil. At the same time, it issued a warning that foreign institutions may be subject to sanctions. According to OFAC, China purchases about 90% of Iran’s crude oil exports, with most of it imported through teapot refineries.

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