Rising tensions around the Strait of Hormuz have people in shipping circles staring at maps again. Not the dramatic kind with warships everywhere—more like the boring, spreadsheet kind, where you count time, risk, and who gets to charge for passage.
At the center of the buzz is Turkey’s Istanbul Canal, a proposal to build a new waterway that would run parallel to the Bosphorus Strait. The idea is to give Europe a Suez Canal-style route, one that could handle around 160 vessels or oil tankers each year.
The pitch isn’t subtle: if it works, it wouldn’t just be another channel on the chart. It’s meant to let Turkey monetise transit traffic in a way similar to Egypt’s Suez Canal and Panama’s interoceanic route—turning a bottleneck into a business model. The estimated price, according to Express, is £20 billion: £12 billion for the canal itself and £8 billion for development on either side, with an expected completion by 2027. In 2021, President Recep Tayyip Erdogan described the project as transformative for Turkey’s economy.
He said: “Today we are opening a new page in the history of Turkey’s development. We see Canal Istanbul as a project to save the future of Istanbul… to ensure the safety of life and property of Istanbul’s Bosphorus and the citizens around it.”
You can hear the logic in that phrasing—safety and future, not just money. Still, the broader story underneath is pretty clear. Misryoum newsroom reported the rising interest in canal-like alternatives is being fueled by the financial pull of places that already charge tolls. The Suez Canal, one of the world’s most profitable waterways, has long been treated as a blueprint for cash-strapped chokepoints to become foreign currency engines for Cairo.
Misryoum editorial team stated that Suez Canal revenues reached $449 million between January 1 and February 8, 2026, with 1,315 ships transiting the route, compared with $368 million during the same period last year. The canal generated about $40 billion between 2019 and 2024 and remains Egypt’s most important source of foreign currency. Even the projections sound like a magnet for planners: the Suez Canal Authority forecasts revenues of roughly $8 billion in the 2026/2027 fiscal year, rising to about $10 billion the following year, while the IMF projects earnings could reach $11.9 billion by 2029/2030 as Red Sea tensions ease. That’s the part people latch onto—strong numbers, and the suggestion that a man-made corridor can legally charge transit fees where natural straits can’t.
Here’s the legal wrinkle that matters for the whole debate. Under the United Nations Convention on the Law of the Sea (UNCLOS), ships have the right of “transit passage” through straits used for international navigation. Countries bordering such straits cannot demand payment for passage, though limited service-related charges are permitted. Egypt and Panama can levy tolls because the Suez Canal and Panama Canal are man-made waterways. Natural routes like the Bosphorus and the Strait of Hormuz generally cannot impose transit fees. Turkey’s proposal—an artificial canal parallel to the Bosphorus—would, in theory, allow structured tolls without breaching international law.
But this is where the tension spills over from engineering to geopolitics. Misryoum newsroom reported Iran is pushing for provisions that would let it demand fees from ships passing through the Strait of Hormuz, despite restrictions under international law. The proposal is tied to Iran’s standoff with Washington, and there’s also mention that Iran explored charging as much as $2 million per ship—raising fears of higher transit costs across global energy and cargo routes. Analytics
firm Kpler estimates that formalising the Strait of Hormuz into a fee-paying corridor could generate between $5 billion and $8 billion annually for Iran and Oman if implemented. Meanwhile, a spokesperson for the UN’s International Maritime Organization warned that introducing such payments would set a “dangerous precedent” for international shipping, noting that global maritime rules prohibit tolls for passage through natural straits. US President Donald Trump also warned Iran over reports of transit charges, saying,
“If they are, they better stop now!”
And it’s not just about rules on paper. Disruptions in shipping lanes are beginning to weigh on the global economy, and rerouting tends to punish everyone—slower journeys, higher insurance, and more expensive freight. According to Atlas Institute, shipping diversions have increased transit times, freight rates and insurance premiums for Africa–Europe trade, adding 10–15 days to Asia–Europe journeys. One can almost imagine the smell of diesel and wet metal at a port office—paperwork piling up as schedules shift. Actually, maybe it’s just the coffee. Still, the effect is real.
The Istanbul Canal ambitions arrive as countries look for toll-based maritime corridors modelled on the Suez Canal and alternatives to the Strait of Hormuz. Morocco and Spain have also renewed discussions around the Strait of Gibraltar, reflecting growing interest in strategic chokepoints. Whether this wave of canal dreams turns into money—or trouble—will depend on something no one can fully build on: the politics that decide whether ships sail, wait, or pay, and how many reroutes the world can absorb before everyone starts asking… differently.
Jess Hull wins 5,000m after rocky 1,500m at Australian champs
Private polar tours and trips to space: the most exclusive travel