Emboldened by its successful blockade of the Strait of Hormuz during the war, Iran is turning to one of the hidden arteries of the global economy: the undersea cables beneath the waterway that carry vast internet and financial traffic between Europe, Asia and the Persian Gulf.
The Islamic Republic wants to charge the world’s biggest tech companies a fee for using an undersea internet cable laid beneath the Strait of Hormuz, and state-linked media outlets have vaguely threatened to disrupt traffic if the companies don’t pay. Lawmakers in Tehran last week discussed a plan that could target submarine cables linking Arab countries to Europe and Asia.
“We will impose tariffs on Internet cables,” Iranian military spokesman Ebrahim Zolfaghari announced on Twitter last week. Media linked to Iran’s Revolutionary Guards said Tehran’s plan to extract revenue from the strait would require companies such as Google, Microsoft, Meta and Amazon to comply with Iranian law, while submarine cable companies would have to pay a license fee for the cable route, with repair and maintenance rights given exclusively to Iranian companies.
Some of these companies have invested in cables running through the Strait of Hormuz and the Persian Gulf, but it is not clear whether those cables pass through Iranian waters.
It is also unclear how the regime can force the tech giants to comply, since tough US sanctions prevent them from making payments to Iran; As a result, companies themselves may view Iran’s statements as posturing rather than serious policy.
Nevertheless, state-affiliated media outlets have issued veiled threats warning of damage to the cables, which could disrupt some of the trillions of dollars in global data transmission and disrupt Internet connectivity around the world.
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CNN has contacted the companies mentioned in the Iranian report.
As fears grow that war could resume after US President Donald Trump returns from China, Iran is increasingly signaling that it has powerful tools beyond military force. The move underscores the importance of the Strait of Hormuz beyond energy exports, as Tehran seeks to transform its geographical advantage into long-term economic and strategic power.
Subsea cables are the backbone of global connectivity, carrying most of the world’s Internet and data traffic. Targeting them would impact internet speeds far beyond reach, putting everything from banking systems, military communications and AI cloud infrastructure to remote work, online gaming and streaming services at risk.
Dina Esfandiari, head of the Middle East at Bloomberg Economics, said Iran’s threats are part of a strategy to demonstrate its dominance over the Strait of Hormuz and ensure the regime’s survival, which is the Islamic Republic’s main objective in this war.
“The aim is to impose such a heavy cost on the global economy that no one will dare to attack Iran again,” he said.
Several major intercontinental subsea cables pass through the Strait of Hormuz. Mustafa Ahmed, a senior researcher at the UAE-based Habtoor Research Centre, who published a paper on the effects of a large-scale attack on submarine communications infrastructure in the Gulf, said that because of long-standing security threats with Iran, international operators have deliberately avoided Iranian waters, instead clustering most cables in a narrow band along the Omani side of the waterway.
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However, two of those cables, Falcon and Gulf Bridge International (GBI), run through Iranian territorial waters, said Alan Mauldin, research director at Telegeography, a telecommunications research firm.
Iran has not explicitly said it would damage the cables, but it has repeatedly declared its intention to punish Washington’s allies in the region through officials, lawmakers and state-linked media. This appears to be the latest asymmetric warfare technique devised by the regime to attack its neighbours.
Equipped with combat divers, small submarines and underwater drones, the Islamic Revolutionary Guard Corps (IRGC) poses a threat to undersea cables, Ahmed said, adding that any attack could create a widespread “digital catastrophe” across multiple continents.
Iran’s neighbors in the Persian Gulf could face severe disruptions in internet connections, impacting vital oil and gas exports as well as banking. Apart from the region, a large portion of India’s internet traffic could be affected, putting its vast outsourcing industry at risk of billions of rupees in losses, according to Ahmed.
The strait is a key digital corridor between Asian data centers like Singapore and some cable landing stations in Europe, Ahmed said. Any disruption could slow financial trade and cross-border transactions between Europe and Asia, while parts of East Africa could face internet blackouts.
And if Iran’s proxies decide to pursue similar tactics in the Red Sea, the damage could be far more serious.
In 2024, three submarine cables were severed when a ship attacked by Yemen’s Iran-aligned Houthi militants dragged its anchor across the sea while sinking, disrupting about 25% of internet traffic in the region, according to Hong Kong-based HGC Global Communications.
Even though the impact of damage to cables could be greater in the Middle East and some Asian countries, Telegeography said, “cables passing through the Strait of Hormuz are likely to account for less than 1% of global international bandwidth by 2025.”
The first transatlantic telegram was sent via undersea cable in 1858, a 98-word congratulatory message from Britain’s Queen Victoria to US President James Buchanan, which took more than 16 hours to arrive. Since then the importance of undersea cables has increased rapidly.
Today, a single optical fiber in modern submarine cables can carry data equivalent to about 150 million simultaneous phone calls at the speed of light, according to the International Cable Safety Committee.
The practice of disrupting underwater communications cables dates back almost two centuries to the laying of the first telegraph cable across the English Channel in 1850. In the opening acts of World War I, Britain cut Germany’s key telegraph cables, cutting off communications with its armies.
Most modern cable damage results in minimal disruption as operators can rapidly re-direct traffic to the global network of undersea networks. Nevertheless, given the world’s almost complete dependence on data flows through these cables, any large-scale damage today would have far greater consequences than in the telegraph age.
Experts say the ongoing war in Iran could also seriously complicate cable repair efforts because maintenance ships would have to remain stationary for long periods of time while repairing faults. According to Mauldin, only one of the five maintenance ships that typically operate in the region remains inside the Persian Gulf, further exacerbating the challenge.
Iranian news outlets have framed a proposal to charge fees for sub-sea cables passing through its waters as a form of compliance with international law, citing the 1982 United Nations Convention on the Law of the Sea (UNCLOS), which contains provisions governing submarine cables.
While Iran has signed the convention but not ratified it, the legal community considers it binding under customary international law. Article 79 of UNCLOS states that coastal states have the right to establish conditions for cables or pipelines entering their territory or territorial sea.
Iranian media outlets have pointed to Egypt as an example. Cairo takes advantage of the Suez Canal’s strategic location to host several undersea cables linking Europe and Asia, generating hundreds of millions of dollars annually in transit and licensing fees.
However, the Suez Canal is an artificial waterway cut through Egyptian territory, while the Strait of Hormuz is a naturally occurring strait that is governed by a different legal framework, according to an international law expert.
“Certainly, for the existing cables, Iran has to abide by the contract that was signed when the cable was laid,” Irini Papanikolaou, a professor of international law at SOAS University of London, told CNN. “But for new ones, any state, including Iran, can decide whether and under what conditions a cable can be laid in its territorial waters.”
Esfandiari of Bloomberg Economics said Iran “knew in theory” that it had influence over the strait, but was unsure how significant its influence would be if it acted on those threats.
Now, he said, Tehran “has figured out the impact.”
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