Iran Eyes Fees on Undersea Internet Cables in the Strait of Hormuz – A New Digital Lever Against the West

Iran has spent months using the Strait of Hormuz to choke off oil shipments. Now, it is eyeing a different kind of flow: digital data. Media outlets linked to the Islamic Revolutionary Guard Corps (IRGC) are pushing Tehran to impose fees on the submarine fibre-optic cables that run through the strait, arguing that the waterway's role in global digital infrastructure could generate billions of dollars and give Iran a new pressure point against the West.

Tasnim News Agency, which is affiliated with the IRGC, has proposed that Iran charge transit fees to the international consortia that own and operate the cables, offer maintenance services, and require companies – including Google, Meta, Microsoft, and Amazon – to operate under Iranian regulations. Mostafa Taheri, a member of Iran's parliamentary Industries Commission, put potential revenues from transit fees at up to $15 billion.

Tasnim and the IRGC-linked Fars News Agency went further. They suggested Iran could monitor data traffic flowing through the cables – infrastructure that carries cloud services, financial messaging systems including SWIFT, and a large share of global internet traffic. Tasnim claimed that at least seven major communication cables serving Gulf countries pass through the strait, including the FALCON, GBI, and Gulf-TGN systems, which connect data centres across Asia, Europe, and the Middle East.

The legal basis for such proposals is, to put it charitably, weak. Iranian outlets cite the UN Convention on the Law of the Sea (UNCLOS), arguing that the strait's narrow geography places its seabed under Iranian and Omani jurisdiction. However, UNCLOS includes a transit passage principle that protects the uninterrupted flow of international navigation and communications. Iran has signed UNCLOS but never ratified it. Submarine cables are owned by international consortia. Any attempt to impose fees or monitor traffic would face immediate international legal and political resistance.

These proposals have not emerged in a vacuum. Tehran has been restricting its own population's access to the global internet even before the war against the US and Israel began in February, part of a crackdown on nationwide protests. NetBlocks reported this week that the blackout had entered its 76th day, with government-backed access schemes producing surveillance, corruption, and scams in place of open connectivity. Iran's communications minister acknowledged in April that around 10 million people depended on stable digital access for their livelihoods and that the shutdown was costing businesses 600 billion tomans a day. The cable fee proposals follow the same pattern: treating digital infrastructure as an instrument of state control.

The Strait of Hormuz, which separates Iran from Oman, is around 22 kilometres wide at its narrowest point. Under normal conditions, roughly one-fifth of the world's oil and liquefied natural gas passes through it. Iran effectively closed it to commercial shipping when the war began, sending energy prices skyrocketing. The US Navy imposed its own blockade of Iranian ports on 13 April. A ceasefire has been in place since 8 April but remains fragile, with Trump describing it this week as having a "one percent chance" of surviving.

So Iran is now looking at cables instead of tankers. Whether the international community will entertain the idea of paying digital tribute to Tehran is another matter entirely. But the proposal itself is a reminder that in the modern era, control over a strait means control over more than just oil. It means control over the internet itself. And Iran knows it.

Written by Sandy van Dongen