Iran's military spokesperson declared last week that Tehran will impose fees on the submarine fiber-optic cables beneath the Strait of Hormuz — issuing demands that US companies Google, Meta, Microsoft, and Amazon are legally barred from meeting under American sanctions law, and threatening that cables could be disrupted if operators refuse to comply.
Brig. Gen. Ebrahim Zolfaghari posted on X that Tehran will levy charges on the underwater cables, while IRGC-affiliated outlets Tasnim and Fars simultaneously outlined a three-phase implementation plan: mandatory licensing fees for cable operators, a requirement that major tech companies operate under Iranian law, and exclusive Iranian control over cable maintenance and repair. The announcement comes as Trump declared this week that the existing ceasefire was "on massive life support" with, in his words, approximately a one-percent chance of surviving, raising immediate fears of resumed military operations near the strait.
Sanctions Make Compliance Legally Impossible for US Firms
American sanctions explicitly prohibit US companies from making payments to Iranian state entities, leaving Google, Meta, Microsoft, and Amazon in an unresolvable bind: comply and break federal law, or refuse and risk infrastructure disruption. Analysts say Iran's awareness of this legal impossibility is deliberate. "This makes Iran's demand come off as more of a 'protection' fee, similar to what they've been doing with tankers," said Isik Mater, director of research at the London-based internet monitoring group NetBlocks. CNN reported that it reached out to all four companies named in the Iranian proposals; none had publicly responded as of Saturday.
Only Two Cables Actually Run Through Iranian Waters — But Both Are Vulnerable
Contrary to some reporting, not all cables through the strait fall within Iranian jurisdiction. Alan Mauldin, research director at TeleGeography, confirmed that the vast majority of cables traverse the Omani side of the waterway — a deliberate routing choice by international operators who have long treated Iran's coastline as a security risk. Only the Falcon network and Gulf Bridge International (GBI) run through Iranian territorial waters. Those two systems primarily serve Gulf states, India, and parts of East Africa — meaning targeted disruption would hit regional connectivity hard while leaving the global internet largely intact: TeleGeography assessed that cables through the Strait of Hormuz represent less than 1% of global international bandwidth as of 2025.
That regional impact, however, would not be trivial. Countries across the Gulf could face internet and banking disruptions. India's outsourcing sector, which relies on uninterrupted data links to serve European and American clients, could suffer significant losses. Parts of East Africa would risk effective connectivity blackouts. In 2024, a commercial vessel struck by Iran-aligned Houthi militants dragged its anchor across the Red Sea seabed while sinking, severing three cables and disrupting roughly a quarter of internet traffic between Asia and Europe. One of those cables took five months to repair because specialized vessels could not safely access the conflict zone.
The IRGC Has the Capability to Act on Its Threats
Iran has stopped short of explicitly threatening sabotage. But Mostafa Ahmed, a senior researcher at the UAE-based Habtoor Research Center, warned that the IRGC's combat divers, Ghadir-class mini-submarines, and underwater drones give Tehran a credible physical capability to threaten seabed infrastructure — and that any attack could trigger a cascading digital catastrophe across several regions. On May 10, Iran confirmed it had deployed Ghadir-class vessels inside the strait itself under heightened readiness conditions. Repair ships must hold stationary position for extended periods to fix cable faults — a significant vulnerability in any contested maritime environment — and the Stimson Center assessed that only two to four cable repair vessels operate in the Middle East region, with war risks having already halted new cable construction across the Persian Gulf.
The Legal Argument Is Weak — But Uncertainty Itself Creates Leverage
Iran cites UNCLOS Article 79, which permits coastal states to establish conditions for cables entering their territorial seas, as justification for the fee plan. Tehran also points to Egypt's Suez Canal, which generates hundreds of millions of dollars annually from transit and licensing fees, as precedent.
Legal experts reject both arguments. UNCLOS Articles 37-44 separately govern international straits like Hormuz, establishing transit passage rights that protect the uninterrupted flow of international navigation and communications — rights that cannot be suspended even in armed conflict, as the 1949 Corfu Channel ruling affirmed. The Egypt analogy fails because the Suez Canal is an artificial waterway excavated through Egyptian land; the Strait of Hormuz is a naturally occurring international strait subject to a different legal framework. Mater noted that Egypt's cable revenue comes from agreements "entered willingly" by operators — the opposite of a coercive fee imposed under threat of damage. Whether Iran's claims would survive an international tribunal is secondary to the immediate effect: the mere threat of enforcement raises insurance premiums, complicates repair logistics, and pushes cable operators toward costly rerouting decisions they must make now.
Iran Is Treating the Digital Strait as an Extension of Its Energy Stranglehold
The cable fee proposal did not emerge in isolation. Tasnim published a detailed mapping of undersea cables and cloud infrastructure across the Gulf in April, explicitly identifying the digital networks serving the UAE, Qatar, Bahrain, Kuwait, and Saudi Arabia as strategic pressure points — and that same month, Iranian drone strikes hit Amazon Web Services facilities in the UAE and Bahrain. Iran's parliamentary Industries Commission member Mostafa Taheri put potential fee revenue at up to $15 billion, though that figure is speculative given the legal and sanctions barriers. IRGC-affiliated outlets went further still, suggesting Iran could monitor data traffic carried on the cables, including the SWIFT financial messaging system and cloud services.
"It aims to impose such a hefty cost on the global economy that no one will dare attack Iran again," Dina Esfandiary, Middle East lead at Bloomberg Economics, told CNN. Tehran, she added, had long understood it held this leverage but previously lacked certainty about how disruptive its use would actually be. The wartime period has resolved that uncertainty.
The US-Iran conflict, which began February 28 when the US and Israel launched an air campaign in response to Iran's closure of the strait, has already produced digital damage beyond energy markets. Both the Strait of Hormuz and the Red Sea are now effectively closed to commercial traffic, trapping the billions of dollars in US cloud infrastructure built across Gulf data centers behind two simultaneous war chokepoints — something that has never happened before. Iran has maintained a nationwide internet blackout now past its 76th day, which its own communications minister acknowledged is costing Iranian businesses 600 billion tomans daily. The digital infrastructure of the region was exposed to kinetic risk long before this week's cable fee declaration.
What Happens Next Depends on Whether the Ceasefire Holds
For tech companies, the near-term calculus is straightforward: paying the fees is illegal under US sanctions law, so they will treat the announcement as pressure rather than actionable policy — at least until enforcement mechanisms materialize. For the broader industry and for policymakers, however, the announcement surfaces a structural vulnerability that has been theorized but never stress-tested at this scale: the concentration of the world's critical digital infrastructure in a handful of geographically exposed maritime corridors, protected by no dedicated legal framework and no established military doctrine. Mater put it plainly: the risk of adversarial subsea cable cuts has always existed, but an open threat from a nation-state adds urgency that the industry can no longer treat as theoretical.
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