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Senator Tom Cotton is pushing the US Treasury to sanction Iran’s newly created Persian Gulf Strait Authority, the entity now charging tolls on ships passing through the Strait of Hormuz. In a letter to Treasury Secretary Scott Bessent, the Arkansas Republican called for sanctions on the PGSA, its officers, and any foreign companies involved in processing the fees.
The Strait of Hormuz is arguably the most important chokepoint in global energy. Roughly a fifth of the world’s oil supply passes through it daily. Iran just put a toll booth on it.
What Iran built, and why Cotton wants it dismantled
The PGSA was established on May 5, 2026, under the umbrella of the Islamic Revolutionary Guard Corps. It became operational around May 18. Within days, Cotton had his letter drafted and sent.
The setup works like this: vessels transiting the strait are now expected to pay fees to the PGSA for passage. Iran created a maritime regulatory body, staffed it with IRGC-linked personnel, and started collecting money from ships that have navigated these waters freely for decades.
Cotton’s letter frames the toll collection as illegal under international norms. He described it as a toll booth system designed to fund Iranian operations. Projections suggest the fees could generate approximately $2 million per vessel for Iran.
The senator didn’t stop at requesting existing sanctions be applied. He hinted at preparing new legislation to expand sanctions powers if Iran continues operating the PGSA in defiance of international norms.
The crypto angle no one is ignoring
Past reports have highlighted Iran’s interest in using digital assets to facilitate toll payments through the PGSA. If that materializes, it would represent one of the most brazen attempts by a nation-state to use cryptocurrency for sanctions evasion.
If the Treasury does move to sanction the PGSA and its associated payment processors, expect the Office of Foreign Assets Control to pay close attention to blockchain-based payment flows. Any wallets, exchanges, or protocols found facilitating PGSA toll payments could find themselves on the Specially Designated Nationals list.
The US has already sanctioned crypto mixers and wallet addresses tied to North Korean operations. Iran-linked addresses would get the same treatment, and the ripple effects on DeFi protocols and centralized exchanges that fail to screen for them could be significant.
A broader Western response is forming
Cotton’s push doesn’t exist in a vacuum. European Union nations expanded their own sanctions frameworks in mid-May 2026, signaling that this isn’t just an American concern.
Iran has framed the PGSA as a response to what it calls a US blockade, layering the toll system into a narrative of sovereign rights over its territorial waters. International maritime law, however, generally guarantees freedom of navigation through straits used for international passage.
Major tanker operators and their insurers face an impossible choice: pay the tolls and risk US sanctions, or refuse and risk Iranian retaliation in a narrow waterway where Iran has previously seized vessels.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
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