Iran's Hormuz Transit Fee Keeps Gulf Sulfur and Fertilizer Stuck

On 23 August 2026, per ANI and Press TV, Iran approved a transit service fee for "authorised" ships crossing the Strait of Hormuz, plus fines, detention or confiscation for vessels breaching its protocols. The Hormuz transit fee matters less for what it costs than for who may pay it: Gulf sulfur, fertilizer and aluminum feedstock may stay stuck.[1][2]

Iran's National Security Commission approved Article 3 of its "Strategic Action to Ensure the Security and Progress of the Strait of Hormuz" plan. The fee covers navigation, environmental, insurance and safety services, payable in Iranian rials or another Iran-approved currency; no amount or effective date was announced.[1] The Persian Gulf Strait Authority added that violating vessels also face restricted future passage, effective immediately.[2]

Background: not an ordinary shipping cost

The payee is an Iranian state authority and the currency is the rial. A shipowner, bank or P&I club bound by US sanctions cannot make that transaction, so this is not a toll that can be added to freight and passed on. It is an eligibility test: ships that can pay may transit, ships that cannot may not.

By vessel count the strait is open. Kpler counted 106 crossings in the week of 27 July to 2 August, 41% with AIS off; UBS estimates that of roughly 6mn b/d of crude crossing, 5-6mn b/d is dark fleet.[4][5] Crude has other outs: the UAE pipes it to the Gulf of Oman, and July Hormuz oil exports fell nearly 53%.[6] Sulfur, urea, ammonia and aluminum loading in the Gulf have none.

Sulfur mainly makes phosphate fertilizer, and over half of traded sulfur crosses Hormuz; roughly 30% of world nitrogen fertilizer production also depends on the strait, with about 1.5m tonnes a month held upstream.[7][8][9][10] Aluminum differs: Iranian drone strikes damaged UAE and Bahraini smelters in March, and about 2.5m tonnes of Gulf capacity is offline.[11][12]

How the fee reaches fertilizer and metal costs

First, sulfur stays expensive. The Tampa contract for Q3 2026 settled at a record $705 per long ton after $655 the prior quarter, and Houston spot spiked to $1,300 per tonne in early August.[7][8]

Second, sulfur buyers cut output. Phosphates are about half of sulfur demand, and Mosaic said industry economics cannot accommodate current sulfur prices; it has curtailed production in the US and Brazil.[7][13]

Third, nitrogen runs the other way. Gulf urea and ammonia cannot get out, and because the US is a net importer whose prices follow the global market, US producers earn a wider spread.[9]

Fourth, for aluminum the variable is the restart timetable, not price. Restarting idled Gulf capacity needs alumina, anodes and caustic soda in and metal out, through Hormuz. Only Emirates Global Aluminium, which can truck cargo around the strait, has announced one, guided to Q1 2027; Alba in Bahrain and Qatalum in Qatar have not.[12][14]

Companies that may be affected

AdvanSix (ASIX), a US chemicals and plant nutrients company, buys roughly 350,000 long tons of sulfur a year; every $100 per long ton change is about a $35m annual cost impact. On 7 August management relayed a third-party forecast of a $200 per long ton decline entering 2027.[7] If the strait stays shut to compliant tonnage that relief may not arrive, worth about $70m a year against FY2025 operating income of $67.5m; Q1 and Q2 2026 were already -$18.7m and -$0.2m.[15]

Mosaic (MOS), a global phosphate and potash producer, uses sulfur; phosphate businesses were 28.3% of FY2025 revenue.[15] Every quarter sulfur stays expensive is another quarter of narrow phosphate stripping margin, which may keep pressing segment operating income: FY2025 operating income was $1,049.7m, H1 2026 an operating loss of $408.4m.[13][15]

CVR Partners (UAN) makes nitrogen fertilizer entirely in the US, on the other side of the stranded Gulf urea and ammonia. In Q2 2026 it turned $202.2m of revenue into $84.8m of operating income, a 42% margin against 21% for FY2025.[15] With plants near full utilisation, price is close to pure incremental margin and may keep showing there; how long the spread lasts depends on transit.[9]

Century Aluminum (CENX), a US and Icelandic primary aluminum producer, took 88.8% of FY2025 revenue from its aluminum segment, every tonne priced at the London Metal Exchange (LME) plus a regional premium.[15] Its sensitivity is $70-75m of quarterly EBITDA for a package including a $400/t rise in LME and $75/t in the US Midwest premium.[11] A delayed Gulf restart may show in realised price and EBITDA. On 12 August, after Emirates Global Aluminium reiterated a Q1 2027 restart, LME aluminum fell $53.50/t and CENX fell 7.88%.[14][15]

How to verify this

The first observable is transit composition, not count: once a fee schedule is published, if the dark-AIS share holds at or above 40% and compliant crossings do not recover, the fee is an eligibility test, not a cost.[4][5] Second is the Gulf fertilizer vessel backlog, which peaked near 60 laden vessels in May before most exited after the US-Iran memorandum; rebuilding in September would mean the non-oil trades have closed again.[16] The Q4 Tampa sulfur contract settles at end-September, CVR Partners reports in late October, the other three in early November.

Three things would break this chain. First, Iran publishes a fee schedule settleable outside its financial system, or Washington licenses owners to pay it, making it a small per-tonne cost. Second, the reopening consensus Oman and Iran announced on 21 August is executed and cargo clears in weeks.[3] Third, attribution failure: these cargoes stay expensive for other reasons, such as the Kazakhstan sulfur blockade Mosaic named alongside Hormuz.[13] Demand may break first too - AdvanSix said elevated sulfur prices "created demand destruction across the industry."[7]

This is only a way to surface transmission chains you may have overlooked - it is not a stock recommendation.

Sources

[1] ANI · 2026-08-23 · https://aninews.in/news/world/middle-east/iran-approves-service-fees-for-authorised-ships-transiting-strait-of-hormuz20260823225824/ [2] Press TV · 2026-08-23 · https://www.presstv.co.uk/Detail/2026/08/23/774950/Iran-to-detain,-confiscate-violating-ships-in-Strait-of-Hormuz--PGSA [3] Vanguard · 2026-08-21 · https://www.vanguardngr.com/2026/08/remaining-sane-in-an-increasingly-insane-world-by-owei-lakemfa/ [4] Foreign Policy Journal, citing Kpler · 2026-08-03 · https://www.foreignpolicyjournal.com/2026/08/03/strait-of-hormuz-crossings-rise-8-week-on-week-but-dark-ais-activity-remains-elevated/ [5] Yahoo Taiwan Stock, citing UBS Evidence Lab · 2026-08-23 · news [6] The National · 2026-08-03 · https://www.thenationalnews.com/business/energy/2026/08/03/uaes-hormuz-oil-exports-more-than-halve-in-july-as-tankers-avoid-route/ [7] Drillr earning_call_summary ASIX · 2026-08-07 · Q2 2026 call [8] aginfo.net · 2026-08-04 · https://www.aginfo.net/report/65994/Line-on-Agriculture/Sulfur-Shortage-Looming [9] Drillr earning_call_summary UAN · 2026-04-30 · Q1 2026 call [10] Drillr earning_call_summary NTR · 2026-08-06 · Q2 2026 call [11] Drillr earning_call_summary CENX · 2026-05-07 · Q1 2026 call [12] mining.com · 2026-03-01 · https://www.mining.com/web/pentagon-war-game-exposed-a-critical-us-aluminum-risk-months-before-iran-attacks/ [13] Drillr earning_call_summary MOS · 2026-08-05 · Q2 2026 call [14] Commercial Times · 2026-08-12 · https://www.ctee.com.tw/news/20260813700668-430702 [15] Drillr financial_statements / company_segment / company_snapshot · FY2025 and 2026 · data [15] Drillr financial_statements / company_segment / company_snapshot · FY2025 and 2026 · data [15] Drillr financial_statements / company_segment / company_snapshot · FY2025 and 2026 · data [16] Hellenic Shipping News · 2026-08-04 · https://www.hellenicshippingnews.com/global-grain-market-outlook-hormuz-the-sea-of-azov-and-chinas-soybean-commitment/