The text of the Iran-U.S. MOU, as read out by U.S. officials and reported in the media, contains two key provisions regarding shipping. While promising to relieve sanctions on Iranian oil sales, the agreement opens the door for Iran to stake a claim in ship passage in Strait of Hormuz and charge a fee for transit. Before the war, Iran did not exercise such a right, and no toll or fee was mandatory for any merchant ship transiting the strait.

The U.S. will fully end its naval blockade within 30 days and has undertaken to terminate all sanctions on Iran according to an agreed schedule. Until then, the U.S. Department of the Treasury will issue waivers for the export of Iranian crude oil and petroleum products. The wording of these waivers will clarify whether sanctions imposed on ships carrying Iranian oil will also be waived. During the 30-day period, traffic will be “proportional” to pre-war levels.

Iran will make efforts to facilitate the transit of vessels free of any charge, but this free passage is explicitly mentioned as applying to only 60 days. Iran will also remove technical and commercial obstacles, including removing mines, within 30 days so that vessels can begin transiting.

Iran will negotiate with Oman, the other key littoral state in the Strait of Hormuz, to define future administrative and maritime services. Iran has said in the recent past that it intends to charge for those services.

Other Persian Gulf states, including Qatar, Saudi Arabia, Iraq, Kuwait, and the UAE, will be involved in discussions on the future status of the Strait of Hormuz. Some of these nations have, in the past, vehemently opposed any toll. International shipping interests, including India, have also opposed tolls.

The inference is that the agreement brings ship passage through the Strait of Hormuz to the negotiating table, with Iran recognised as a key stakeholder. 

The MOU states that the future arrangements will be in accordance with international law.

A key body of international law governing shipping is the United Nations Convention on the Law of the Sea (UNCLOS), which the U.S. has not ratified. Iran has signed it but has not ratified it.

UNCLOS contains detailed provisions on various types of straits. In the Strait of Hormuz, one side leads to a semi-enclosed body of water, much as the Black Sea does, while the other opens into the Gulf of Oman and eventually the open sea. UNCLOS discusses such straits as areas where no toll should be levied, but where vessels enjoy transit rights rather than open-sea navigation rights if no international waters or exclusive economic zone corridor passes through the strait. 

While Iran had presented a toll on the Strait of Hormuz as a means of funding post-war reconstruction, the agreement provides for a separate massive reconstruction fund in addition to oil-sale revenues. More significant than any toll, however, is that a formal agreement recognising Iran as a stakeholder in the Strait of Hormuz would be consistent with Iran’s description of the strait as the place where its sword will hang as a guarantee against future attacks.

The Israeli military struck ‌Iran and Beirut on Saturday (March 21, 2026) as the U.S. was sending thousands more Marines to West Asia and ​President Donald Trump accused NATO allies of cowardice over their reluctance to help open the Strait of Hormuz.

Also read: West Asia war updates on March 21, 2026

More than ⁠2,000 people have been killed since the U.S. and Israel attacked Iran on February 28, while Americans appear increasingly concerned at signs the war could expand further as it enters its fourth week.

Israel said it was attacking Hezbollah on Saturday (March 21, 2026) in the Lebanese capital as it steps up airstrikes targeting ‌the Iran-backed militia in the deadliest spill over from the war on Iran since Hezbollah fired on Israel in support of Tehran on March 2.

Israel also launched new attacks on Iran on Saturday (March 21, 2026), including on the capital, Tehran, its military ‌said.

Germany and France ready to help on Hormuz

Vital energy infrastructure in Iran and neighbouring Gulf states has also been ‌attacked, ⁠and oil prices have jumped 50% since the war began, threatening global economic shock.

In the U.S., United Airlines ⁠said it would cut its scheduled flights by 5% in the second and third quarters, planning for prolonged higher oil prices.

The Strait of Hormuz, a conduit for around a fifth of global oil and liquefied natural gas supplies, has been effectively closed to most shipping since the United States and Israel launched the war against Iran.

Mr. Trump on ​Friday (March 20, 2026) called U.S. allies “cowards” for declining to help open ‌the strait while fighting continued.

Several allies, who were not consulted before the war, have pledged to join “appropriate efforts” to ensure safe passage through the strait, but Germany and France have said fighting must stop first. German Chancellor Friedrich Merz said he would speak to Mr. Trump this weekend.

Iran is ready to let Japanese-related vessels pass through the Strait of Hormuz, Kyodo News reported on Saturday (March 21, 2026), ‌citing Iranian Foreign Minister Abbas Araqchi. Japan gets around 90% of its oil shipments via the strait.

The Trump White House, ​in an effort to increase supply and lower prices, said it would waive sanctions for 30 days to allow the sale of 140 million barrels of Iranian oil stranded on tankers by the war. The administration ⁠had previously eased sanctions on a similar amount of sanctioned Russian oil.

The Israeli military said before its Saturday (March 21, 2026) attacks it had issued evacuation warnings for seven neighbourhoods in the southern suburbs of Beirut. More than 1,000 people have been killed in Lebanon and over 1 million have been displaced ‌in the Israeli attacks.

Mr. Trump said the United States was close to reaching its goals in the war, which include degrading Iran’s military and preventing it from developing a nuclear weapon, and ​might wind down its military effort.