"If we create a precedent in the Middle East where a nation-state can decide to control an international waterway, charge a toll, and blow up your ships if you don't pay, we have created a very dangerous precedent that will repeat itself in other parts of the world, including this region," Rubio told envoys at a Manila gathering of the Association of Southeast Asian Nations (ASEAN).

"At its core, it's very simple. Iran demands the right -- which they do not have under any existing legal mechanism -- to control the transit of traffic through the Strait of Hormuz," he said.

"There is a fundamental principle about freedom of navigation that is threatened," he added.

"That cannot be allowed to happen."