Senator Tom Cotton is urging the U.S. government to impose sanctions on the Persian Gulf Strait Authority (PGSA), a body that administers tolls on vessels passing through the strategic waterway. The tolls, imposed by Iran, have drawn the Arkansas Republican's ire as a potential violation of international norms and a threat to global trade.
Why Cotton is pushing sanctions
In a recent statement, Cotton argued that the PGSA's tolling scheme amounts to an unlawful levy on international shipping. He described it as a form of economic coercion that undermines the principle of free navigation. Cotton wants the Treasury Department to designate the PGSA under existing sanctions authorities, which would freeze any U.S.-based assets and bar American companies from doing business with the authority.
The senator's call comes amid rising tensions in the Persian Gulf, where Iran has used its strategic position to exert pressure on maritime traffic. The tolls apply to all vessels transiting the strait, a chokepoint for about 20% of the world's oil shipments.
Risks of escalation
Sanctioning the PGSA could escalate an already volatile situation. Iran views the strait as within its sphere of influence and has previously threatened to close it in response to Western pressure. A U.S. sanctions move might provoke retaliatory measures, including further restrictions on shipping or even military posturing.
Diplomatic observers note that any unilateral action by Washington could alienate Gulf allies who rely on the strait for their own exports. The PGSA itself is a little-known entity, but its tolls are a tangible expression of Iran's leverage over global energy flows.
Impact on global oil supply chains
Disruption to the strait's operations would hit oil markets hard. Tankers carrying crude from Saudi Arabia, Iraq, Kuwait, and the UAE pass through daily. If sanctions cause the PGSA to retaliate—say, by raising tolls or blocking ships—the cost of oil could spike. The International Energy Agency already monitors the strait as a critical vulnerability in global supply.
Cotton's proposal doesn't detail how sanctions would be enforced, but the mere threat could create uncertainty. Shipping companies may reroute tankers, adding days and costs to voyages. That's a risk the industry is acutely aware of.
Maritime law questions
At the heart of the dispute is a legal question: can a littoral state impose tolls on transit passage? The United Nations Convention on the Law of the Sea guarantees freedom of navigation through straits used for international navigation. Iran is not a signatory, but it has long argued that it has the right to regulate traffic for environmental and safety reasons.
Critics see the tolls as a de facto tax on global commerce. Sanctions against the PGSA would be a U.S. judgment that the practice violates international law. That could set a precedent for how other governments respond to similar tolls elsewhere.
For now, the White House hasn't commented on Cotton's request. The Treasury Department is reviewing the proposal, according to a staffer familiar with the matter. Whether sanctions move forward may depend on how the administration weighs the risk of escalation against the principle of free passage.
