Trumps Strait of Hormuz Fee Could Double the Cost of Shipping

The fee that President Trump wants to charge ships going through the Strait of Hormuz would significantly increase the cost of transporting oil and other products through the crucial waterway, shipping operators and logistics experts said.On Monday, Mr.Trump said the United States would charge a 20 percent fee on all cargo shipped through the strait, as a way to recover the cost of providing military protection to vessels using the waterway.Some analysts said they doubted whether the fee would come into existence because of the costs it would impose.

And for ship operators in the region, the prospect of fees is less of a concern right now than the escalation of the conflict between Iran and the United States in recent days.Still, the fact that the United States, a longtime supporter of freedom of navigation in the strait and elsewhere, is now pushing for a fee, and the sheer magnitude of the charge, is stirring up concern.Mr.Trump did not explain exactly how the 20 percent fee would be calculated.But if it were charged on the value of the cargo, it could more than double the cost of shipping oil through the strait.Rico Luman, a senior economist specializing in logistics at ING Research, said tanker companies charge around $10 a barrel to transport oil from the Persian Gulf to Europe.

Given that a barrel of oil costs around $80, Mr.Trump’s fee could add another $16 per barrel to ship the oil through the strait, Mr.

Luman said, taking the overall transportation cost to $26 per barrel.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access.If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe....