The Islamic Republic of Iran has launched a digital insurance platform, titled Hormuz Safe, in order to guarantee safe passage through the Strait of Hormuz and provide coverage for commercial vessels.
The platform will rely on cryptocurrency payments from vessels and is being advanced by the Iranian Economy Ministry, according to a Saturday report by Fars News Agency. "The Ministry of Economy is advancing a plan that would make the management of the Strait of Hormuz possible through insurance - a model that would be acceptable to other countries during peacetime while still allowing Iran to exercise control over the Strait," the agency’s correspondent reported, citing a government document.
"Under this plan, Iran would achieve informational dominance and be able to distinguish between the transit of vessels from different countries," the report added.
"From an international law perspective, while imposing tolls on ships in the post-war period may be possible, it would carry political costs. Management of the Strait would then be limited to selling services, which, under the best circumstances, would generate up to $2 billion in revenue for Iran. Under the Economy Ministry's plan, managing the strait through an insurance framework would enable the issuance of various marine insurance policies as well as certificates of financial responsibility," it explained.
According to the document, the plan will start with insurance covering inspection, detention, and confiscation. Damage from military attacks would not be covered.
The ministry estimates that "this approach, while assuming low risk, would generate over $10 billion in revenue" for Iran. Since the start of the unprovoked US-Israeli war on Iran, the Strait of Hormuz has been closed to Washington and Tel Aviv.
Chinese ships and vessels belonging to other nations, which have coordinated with Iran, including France and India, have at times crossed throughout the war and the so-called ceasefire period.
The Islamic Republic of Iran Broadcasting (IRIB) network reported on May 16 that several European governments have opened direct channels with Tehran to discuss safe passage through the waterway.
The Fars News Agency report comes weeks after Bloomberg said Iran has set up a "toll booth" in the strait, requiring ships to undergo vetting and pay fees for safe passage.
One of Tehran’s main terms is a new global system that would grant authority over the Strait of Hormuz, in coordination with Oman and potentially other regional states.
Iranian media said days ago that Iranian and Omani officials convened a legal-technical meeting in Muscat to discuss the Strait of Hormuz, arrangements for the secure passage of ships, and the sovereign rights of both nations over the waterway. The US has maintained an 'illegal' blockade of Iranian ports since the ceasefire began, while repeatedly threatening to renew bombardment. Israel has also said it is awaiting US approval to renew attacks against Iran.
Washington violated the truce earlier this month by attacking several vessels and bombing Iran’s coast. Iranian forces targeted two US military vessels in response (while the Pentagon maintains it was the other way around). The next day, skirmishes broke out between Iranian and US forces in the Strait of Hormuz.
Iranian officials are warning that "restraint has ended" and that renewal of the war will result in "crushing" responses.