A slowdown in your bank transfer. A lag in financial markets. A region-wide internet blackout. After the Middle East war put the world through an oil and energy shock, Iran has set its eyes on another Achilles’ heel: the subsea cables running beneath the Strait of Hormuz.
Tehran is seeking to levy fees on firms including Google, Microsoft, Meta and Amazon for use of the submarine cables that pass beneath the strait, according to reports from state-linked Iranian media. The same outlets have warned that traffic could face disruption should companies refuse to cooperate.
Iranian military spokesperson Ebrahim Zolfaghari said on X last week, “We will impose fees on internet cables.”
Media outlets linked to Iran’s Revolutionary Guards reported that the plan would require major technology firms to comply with Iranian law and ask submarine cable operators to pay licensing fees. Repair and maintenance rights would also be handed exclusively to Iranian companies.
How Iran would enforce this remains unclear, since US sanctions currently prohibit American firms from making payments to Tehran.
Why Subsea Cables Matter
Subsea cables form the foundation of global digital connectivity, carrying the majority of the world’s internet and data traffic. Any serious damage to them would cause more disruptions than just slower internet speeds, potentially affecting banking systems, military communications, artificial intelligence, financial trading and cross-border transactions.
Several major intercontinental subsea cables pass through the Strait of Hormuz. Given long-standing security concerns around Iran, international operators have historically routed most cables through a narrow corridor on the Omani side of the waterway. However, two cables, Falcon and Gulf Bridge International, do pass through Iranian territorial waters, Alan Mauldin, research director at TeleGeography, a telecoms research firm, told CNN.
The consequences of any disruption would be felt widely. Iran’s neighbours could face severe internet outages. India could also see a large share of its internet traffic affected.
The strait also serves as a critical digital link between major Asian data hubs such as Singapore and cable landing stations in Europe. Parts of East Africa could face internet blackouts, while financial trading and cross-border transactions between Europe and Asia could also slow considerably.
While most modern cable damage can be managed through rerouting across alternative networks, a large-scale disruption would carry far greater consequences, given how much the world depends on data flowing through these cables. The maintenance will be another challenge as repair vessels must remain stationary for extended periods when fixing faults, which won’t be possible if Iran actively attacks them.
Does International Law Back Iran’s Claim?
Iranian media claims that if Tehran decides to levy a fee, it would be consistent with international law, citing the 1982 United Nations Convention on the Law of the Sea, known as UNCLOS. Article 79 of the convention gives coastal states the right to set conditions for cables or pipelines entering their territory or territorial waters.
Iran has signed but not ratified UNCLOS.
Tehran has also cited Egypt as an example, which charges transit and licensing fees for sub-sea cables passing through the Suez Canal. However, the Suez Canal and the Strait of Hormuz are different, as one is an artificial waterway built through Egyptian territory, and the other is a natural strait.
