Iran Explores New Energy Potential Beneath the Strait of Hormuz

Iran is leveraging its geopolitical stance to assert control over critical subsea internet cables beneath the Strait of Hormuz. Following its wartime blockade success, the Islamic Republic aims to charge major tech companies for the use of these cables, which play a pivotal role in global internet and financial communications.

The Iranian government has conveyed intentions to impose fees on the subsea internet cables utilized by global tech giants, coupled with vague threats of disruption for non-compliance. Last week, Tehran lawmakers discussed plans to specifically target submarine cables that connect Arab nations to Europe and Asia.

“We will impose fees on internet cables,” Iranian military spokesperson Ebrahim Zolfaghari stated on X. Media outlets affiliated with the Revolutionary Guards indicated that this strategy would require compliance with Iranian laws from companies like Google, Microsoft, Meta, and Amazon. Additionally, submarine cable companies would need to obtain licenses and would grant repair and maintenance rights solely to Iranian firms.

Some of these tech firms have invested in the cables that run through the Strait of Hormuz and the Persian Gulf; however, it remains unclear if those cables actually pass through Iranian waters.

It is also uncertain how the Iranian regime could enforce compliance from tech giants, as they are restricted from making any payments to Iran due to stringent US sanctions. Consequently, these companies may interpret Iran’s threats as mere posturing rather than actionable policies.

Nevertheless, state-affiliated media has hinted at potential threats to cables, suggesting that disruptions could jeopardize global internet connectivity and impact trillions of dollars in data transmission.

CNN has reached out to the companies referenced in the Iranian report.

Amid escalating concerns that the conflict could reignite with the return of US President Donald Trump from China, Iran is signaling that it possesses options beyond military might. This strategy highlights the strategic weight of the Strait of Hormuz, as Tehran seeks to convert its geographic advantages into sustained economic and political leverage.

Subsea cables are vital for global connectivity, facilitating the majority of internet and data traffic worldwide. Targeting these cables could lead to far-reaching implications, adversely affecting banking systems, military communications, AI cloud services, remote work, online gaming, and streaming platforms.

Iran’s rhetoric reflects a broader strategy to assert its influence over the Strait of Hormuz, with the overarching aim of safeguarding the regime’s stability during the ongoing war, according to Dina Esfandiary, Middle East lead at Bloomberg Economics.

“The objective is to impose such a substantial burden on the global economy that potential aggressors would think twice before attacking Iran again,” she remarked.

Several significant intercontinental subsea cables navigate through the Strait of Hormuz. Due to long-standing security concerns related to Iran, many international operators strategically avoid Iranian waters, typically positioning the majority of cables along the Omani side of the waterway, according to Mostafa Ahmed, senior researcher at the Habtoor Research Center in the UAE.

However, two cables, Falcon and Gulf Bridge International (GBI), do traverse Iranian territorial waters, according to Alan Mauldin, research director at TeleGeography.

While Iran has not explicitly threatened to damage these cables, officials and media linked to the state have repeatedly indicated a willingness to retaliate against Washington’s regional allies. This approach appears to be part of the regime’s broader strategy of asymmetric warfare against its neighbors.

Equipped with combat divers, small submarines, and underwater drones, the Islamic Revolutionary Guard Corps (IRGC) poses a significant threat to underwater cables, Ahmed stated, warning that any attack could incite a widespread “digital catastrophe” across multiple continents.

Neighboring countries across the Persian Gulf may experience severe disruptions to their internet connectivity, impacting essential oil and gas exports as well as banking systems. India might also see significant consequences, jeopardizing its substantial outsourcing industry with potential losses amounting to billions, according to Ahmed.

The strait serves as a crucial digital corridor connecting Asian data hubs, such as Singapore, with various cable landing stations in Europe. Disruptions in this area could slow down financial transactions and trading between Europe and Asia, and parts of East Africa may experience internet outages.

Moreover, should Iran’s proxies engage in similar tactics in the Red Sea, the potential for damage could escalate significantly.

In 2024, three submarine cables were severed when a vessel targeted by Yemen’s Iran-aligned Houthi militants dragged its anchor across the seabed while sinking, which resulted in a disruption of nearly 25% of regional internet traffic, according to HGC Global Communications based in Hong Kong.

Although the damage to cables could result in significant consequences for the Middle East and some Asian nations, TeleGeography noted that “cables passing through the Strait of Hormuz account for less than 1% of global international bandwidth as of 2025.”

The first transatlantic telegram was transmitted through an undersea cable in 1858, taking more than 16 hours to deliver a 98-word message from Queen Victoria of Britain to US President James Buchanan. Since then, the significance of undersea cables has increased immensely.

Today, a single optical fiber within modern submarine cables can transmit data comparable to approximately 150 million simultaneous phone calls at light speed, as reported by the International Cable Protection Committee.

The disruption of underwater communication cables has been a practice for nearly two centuries, dating back to the laying of the first telegraph cable in the English Channel in 1850. Notably, during World War I, Britain severed Germany’s critical telegraph cables, isolating its forces from communication.

While most modern cable damage results in minimal disruptions due to the ability of operators to swiftly reroute traffic, any significant damage today would have far-reaching implications compared to the telegraph era, considering the global reliance on data flow through these cables.

The ongoing conflict in Iran could further complicate any repair efforts on damaged cables, as maintenance vessels must remain stationary for extended periods to effect repairs. Currently, only one of the five maintenance ships usually deployed in the Persian Gulf remains active, highlighted Mauldin.

Iranian state media has presented the proposal to charge for the subsea cables that run through its territorial waters as compliant with international law, referencing the 1982 United Nations Convention on the Law of the Sea (UNCLOS), which conditions the governance of submarine cables.

Iran has signed but has yet to ratify this convention, which legal experts consider binding under customary international law. Article 79 of UNCLOS grants coastal nations the right to establish conditions for cables or pipelines entering their territorial sea.

Iranian media has cited Egypt as a precedent for its proposals. The Suez Canal has been utilized strategically to facilitate many subsea cables connecting Europe and Asia, generating substantial transit and licensing fees.

However, the Suez Canal is an artificial waterway created within Egyptian territory, whereas the Strait of Hormuz is a naturally occurring passage governed by a different legal framework, according to international law experts.

“For existing cables, Iran must adhere to previously established contracts,” stated Irini Papanicolopulu, a professor of international law at SOAS University of London. “For future cables, any nation, including Iran, can stipulate under which conditions cables may be laid in its territorial waters.”

Esfandiary from Bloomberg Economics observed that Iran “theoretically understood” its leverage over the strait but was uncertain of the actual consequences of acting on its threats.

Now, she noted, Tehran “has recognized its potential influence.”

Key Takeaways

• Iran aims to levy fees on subsea internet cables, targeting major tech companies for compliance.
• The threats may indicate Iran’s strategic use of geographical leverage in geopolitical conflicts.
• Subsea cables are crucial for global internet and data traffic, and disruptions could have wide-ranging effects.
• While the impact on bandwidth globally is small, regional consequences could be severe.
• Iran’s actions represent a form of asymmetric warfare against neighbors and adversaries.

FAQ

What are subsea cables?

Subsea cables are underwater fiber optic cables that carry the majority of international internet traffic and communications.

How might Iran enforce fees on these cables?

Enforcement may be complicated by international sanctions barring payments to Iran, raising questions about compliance from global tech companies.

What could be the impact of disrupting internet cables?

Disruptions could severely affect banking systems, military communications, and everyday internet usage across various sectors.

How does the Suez Canal compare to the Strait of Hormuz regarding cables?

The Suez Canal is a man-made waterway that hosts multiple cables, while the Strait of Hormuz is a natural strait, complicating jurisdictional claims.

Understanding the geopolitical implications of Iran’s actions regarding subsea cables is essential for assessing future international relations and global connectivity.