Commentary: Iran is pressing its strategic advantage by eyeing fees on undersea cables in Strait of Hormuz

A GEOSTRATEGIC LOGIC

The geostrategic logic is obvious to anyone who looks at the submarine cable map. Cables close to Iran – including the FALCON, Gulf Bridge International/Middle East-North Africa, Kuwait-Iran, and UAE-Iran systems – run through the Gulf and near the Strait of Hormuz, placing digital infrastructure in the same contested area as tankers and naval patrols.

The geography matters because cables are not taxed where data is consumed, but where the infrastructure carrying it can be threatened. The companies most exposed may be American, but the vulnerability is not located in Silicon Valley or Seattle. It is concentrated at landing points, within territorial waters, and in narrow maritime approaches where states can turn permission into leverage. Iran’s proposal exploits this mismatch between the digital economy’s profits, which are global, and its weakest points, which remain localised.

This form of rentier power is different from the 20th-century model, which rested on ownership of oil, minerals, land, ports, and financial infrastructure. Iran has figured out that it does not need to own the flow of a critical good to gain an advantage; it only needs to threaten that flow at a single point.

Submarine cables highlight the hard physical reality that underpins digital life. Undersea networks are not invisible plumbing. The “cloud” does not actually resemble a cloud. They are old-fashioned infrastructure, routed through theaters of politics and power. The cloud has a seabed, and data flows depend on specific landing stations, repair ships, licenses, corporate owners, and security guarantees. That physical dependence makes cables attractive targets in modern conflict. Even temporary damage can have serious economic, military, and financial consequences.