Digital ‘catastrophe’?: Iran now eyes internet cables beneath Hormuz

Dubai: Having tested the world’s dependence on the Strait of Hormuz through wartime oil disruptions, Iran is now signaling it could target another critical global artery — the subsea internet cables carrying financial transactions, cloud services and digital communications between Europe, Asia and the Gulf, according to a report by CNN.

Iranian officials and state-linked media outlets have floated plans to impose fees on submarine internet cables linked to the strategic waterway, while warning that companies refusing to comply could face disruptions.

The proposal marks a potentially dangerous expansion of Tehran’s pressure tactics as fears grow that the conflict could reignite following US President Donald Trump’s return from China and renewed speculation over possible military action against Iran.

According to CNN, Iranian military spokesperson Ebrahim Zolfaghari declared last week on X: “We will impose fees on internet cables.”

Weaponising every layer of Hormuz

Media outlets linked to Iran’s Revolutionary Guards reportedly said global tech giants such as Google, Microsoft, Meta and Amazon would be required to comply with Iranian regulations, while submarine cable operators could face licensing fees and restrictions giving repair and maintenance rights exclusively to Iranian firms.

How subsea internet cables work

• Subsea cables are fiber-optic lines laid across the ocean floor to carry internet and data traffic between continents.

• They handle nearly all global internet communications, including banking transactions, cloud computing, video calls and streaming.

• Specialised cable-laying ships place the cables along carefully mapped seabed routes.

• In shallow waters, cables are often buried under the seabed to protect them from anchors and fishing activity.

• The cables transmit data using pulses of light through optical fibers at extremely high speeds.

• Repeater stations placed along the route boost signals over long distances.

• If damaged, repair ships must locate the fault, retrieve the cable from the seabed and splice it back together.

• Modern global internet systems rely heavily on subsea cables because satellites cannot efficiently handle the same volume and speed of global data traffic.

Although it remains unclear how Tehran could enforce such demands under heavy US sanctions, analysts say the threats themselves highlight Iran’s growing willingness to weaponise every layer of the Strait of Hormuz — not just oil shipping routes but also the hidden digital infrastructure beneath them.

Subsea fiber-optic cables form the backbone of the global internet, carrying the overwhelming majority of international data traffic, including banking transactions, cloud computing, AI infrastructure, military communications and financial trading.

Any serious disruption could ripple far beyond slower internet speeds.

Catastrophic effect

Experts warn that damage to critical cables in the Strait of Hormuz could impact banking systems, stock exchanges, energy operations, cloud services, remote work platforms and communications networks across multiple continents.

“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.

Several major intercontinental cables pass through the Strait of Hormuz and the Arabian Gulf, linking Europe, Asia and the Middle East.

Because of longstanding security concerns surrounding Iran, international operators have largely routed cables closer to Oman’s side of the waterway. However, some key systems — including the Falcon and Gulf Bridge International (GBI) cables — still pass through Iranian territorial waters, according to telecom research firm TeleGeography.

Security analysts say Iran’s Revolutionary Guards possess capabilities that could threaten underwater infrastructure through combat divers, mini-submarines and underwater drones.

Mostafa Ahmed, a senior researcher at the UAE-based Habtoor Research Center, warned that any attack on subsea communications infrastructure could trigger a cascading “digital catastrophe” across several regions.

Worldwide disruptions

Countries across the Gulf could face internet and banking disruptions, while India’s outsourcing and technology sectors could suffer major losses if critical data flows are interrupted.

The Strait of Hormuz is also a vital digital corridor linking Asian data hubs such as Singapore with Europe. Any large-scale disruption could slow financial trading, disrupt cross-border transactions and affect cloud-based services worldwide.

The concerns are not theoretical.

In 2024, three submarine cables in the Red Sea were severed after a vessel struck by Yemen’s Iran-aligned Houthi militants dragged its anchor across the seabed while sinking, disrupting nearly 25 per cent of internet traffic in the region, CNN reported, citing HGC Global Communications.

Iranian media outlets have defended the proposed cable fees by citing international maritime law and comparing the move to Egypt’s management of the Suez Canal, which generates major revenue from global shipping and subsea cable traffic.

Legal experts, however, say the comparison is flawed.

Unlike the Suez Canal — an artificial waterway fully controlled by Egypt — the Strait of Hormuz is an international strait governed by different legal principles under the UN Convention on the Law of the Sea (UNCLOS).

Still, analysts say the bigger concern is not whether Iran can legally impose fees, but that Tehran increasingly appears willing to turn Hormuz into both an energy choke point and a digital choke point in its confrontation with the West.