Key Republican senator claims he is drafting new legislation to prevent Tehran from generating up to $2 million per ship through a proposed toll system in the Strait of Hormuz. Sen. Tom Cotton (R., Ark.) has directed the Trump administration to sanction any country or entity assisting Iran in establishing an “illegal toll booth” in the critical shipping lane, according to a letter obtained by sources.
The letter sent Thursday to Treasury Secretary Scott Bessent responds directly to Iran’s efforts to create a permanent Hormuz toll system alongside Oman, a U.S. ally. Cotton emphasized that any government, shipowner, or financial institution legitimizing Iran’s scheme “enables the IRGC and undermines the global trading system,” adding that formal recognition would violate freedom of navigation principles and set a dangerous precedent for coastal states near major maritime routes.
Iran formally established the Persian Gulf Strait Authority (PGSA) Thursday, declaring it has defined the boundaries of its management zone extending from the Strait into the Gulf of Oman. Under this framework, commercial vessels would need to disclose ownership, insurance, crew details, and cargo to Tehran, which could charge up to $2 million per ship for passage. Cotton stated the PGSA “operates directly under the Islamic Revolutionary Guard Corps (IRGC), a designated Foreign Terrorist Organization,” meaning every dollar collected finances a sanctioned entity.
“The PGSA cannot operate without the consent of other nations,” Cotton wrote, urging the use of existing authorities to sanction PGSA leaders and entities facilitating toll payments. He described fresh sanctions as critical to “detonate” the organization before it begins harassing ships. President Donald Trump and Secretary of State Marco Rubio both condemned the system Thursday, with Trump stating, “We want it free,” and Rubio noting that Iran’s move would prompt U.S. action at the UN Security Council.
Cotton is the first lawmaker to propose legislation targeting the PGSA, which has garnered support from China and numerous Arab nations despite being labeled “unacceptable” by Washington.