Internet Cables in the Strait of Hormuz Become Iran's New Money Maker?
For years, the Strait of Hormuz has been known as a crucial route for global oil distribution. However, Iran is now beginning to view the area as a global “digital pressure point”.
The Tasnim news agency, which is close to Iran’s Islamic Revolutionary Guard Corps (IRGC), has called for Iran to start generating revenue from the underwater fibre-optic internet cables that cross the Strait of Hormuz.
At least seven international underwater internet cables pass through the Strait of Hormuz. These cables serve as vital pathways for data connections between Asia, the Middle East, and Europe, including for cloud data centres and global internet services.
According to Tasnim, more than $10 trillion in global financial transactions occur daily through the underwater internet cables passing via that route.
Therefore, in its article titled “Three practical steps for generating revenue from Strait of Hormuz internet cables”, Tasnim urges the Iranian government to take three main steps.
The Fars media outlet, also affiliated with the IRGC, has reported similarly. Fars describes Hormuz as a “hidden digital toll road” that could become a new instrument of power for Iran.
Under the proposed plan, foreign companies would be required to seek permission and pay transit fees for internet cables crossing the area.
If Iran truly implements new controls or levies, analysts fear the impact could extend to the global financial system, cloud services, and operations of major technology companies.
The call to impose a “tax” on underwater internet cables in the Strait of Hormuz appears to emulate what Egypt has done. The Land of the Pyramids does indeed collect transit fees for underwater internet cables connecting the Red Sea and the Mediterranean Sea.
This is the model that Iran now seems keen to replicate for the Strait of Hormuz, as gathered by KompasTekno from Seoul Economic Daily and Iran International.
The Strait of Hormuz is a winding waterway approximately 33 kilometres wide at its narrowest point.
The strait connects the Persian Gulf with the Gulf of Oman, which then serves as a shipping route to global markets. The two countries have sovereignty over their respective coastal waters.