The Strait of Hormuz
The Strait Nobody Can Afford to Lose
There is a stretch of water between Iran and Oman, about 21 miles wide at its narrowest point, with a shipping channel in each direction barely two miles across. Most people who fill a gas tank or heat a home have never heard of it. Most people who fill a gas tank or heat a home are, whether they know it or not, downstream of it. The Strait of Hormuz is the drainpipe for the Arabian Gulf’s oil and gas, and for seven decades the global economy has been built on the assumption that the drainpipe stays open. That assumption broke this year. It is not clear it can be fully repaired.
This is an explainer and an argument. The explainer part is straightforward: what the strait is, why it matters, what happened when Iran tried to shut it, and what the shutting cost. The argument part is less comfortable, and it is this: a global economy with a single point of failure this large was never a stable arrangement to begin with, and the fix is not a better guarantee from whichever government happens to hold the region’s security umbrella that year. The fix is not depending on the guarantee in the first place.
What and Where
The Strait of Hormuz connects the Arabian Gulf, the body of water most of Iran’s northern coastline sits on, called the Persian Gulf in Iranian and much Western usage, and referred to here as the Arabian Gulf in keeping with the usage of the Arab states on its southern shore, to the Gulf of Oman and, from there, the Arabian Sea and the open ocean. Iran sits on the north side. Oman’s Musandam peninsula sits on the south side, an exclave separated from the rest of the country by the United Arab Emirates. The strait is deep and wide enough to carry the largest crude oil tankers built, which is the whole reason it matters. Every producing country in the Arabian Gulf, Saudi Arabia, Iraq, Kuwait, Qatar, the UAE, and Iran itself, has to move the bulk of its oil and gas through this one channel to reach a customer.
Before this year’s war, the U.S. Energy Information Administration put average daily flow through the strait at around 20 to 21 million barrels of oil and petroleum products, roughly a quarter of all seaborne oil traded on earth and about a fifth of total global petroleum consumption. Add liquefied natural gas, most of it loaded in Qatar, and another fifth of the world’s LNG trade passed through the same channel. No other chokepoint on the planet carries that much energy through that little water. The Strait of Malacca, between Indonesia and Malaysia, moves more oil in absolute terms, but it has alternate routes if it’s ever closed. Hormuz does not. Saudi Arabia and the UAE have pipelines that can move a combined few million barrels a day around the strait. Everyone else, Iraq, Kuwait, Qatar, Bahrain, has no way out except through it.
Before the war, somewhere between 120 and 140 vessels crossed the strait daily, about half of them oil tankers. Roughly 84 percent of the crude that came through went to Asia. China alone took more than a third of it. India, Japan, and South Korea took most of the rest. The United States, by contrast, imported less than a million barrels a day through Hormuz even before its own production boom, and that number had been cut in half again by the time the war started, down to around 7 percent of U.S. crude imports and roughly 2 percent of total U.S. petroleum consumption. This matters for understanding who actually gets hurt when the strait closes. It is not primarily an American problem. It is an Asian problem, a Gulf Arab problem, and a global price problem, in that order.
The exporters on the other end of that trade are just as concentrated. Saudi Arabia alone accounts for roughly 37 to 38 percent of all crude and condensate moved through the strait, according to EIA figures for early 2025. Iraq follows at around 23 percent, the UAE at about 13 percent, with Iran and Kuwait rounding out the top five at roughly 10 percent apiece. That means two countries, Saudi Arabia and Iraq, together account for something like 60 percent of everything moving through the water. Of that whole group, only Saudi Arabia and the UAE have working pipelines that bypass the strait entirely, the Saudi East-West line to the Red Sea and the UAE’s link to its Fujairah terminal on the Gulf of Oman, together carrying a combined capacity of some 6.5 million barrels a day, only a portion of which typically sits unused and ready as backup. Everyone else in the Gulf, Iraq, Kuwait, Qatar, Bahrain, has no way out that doesn’t run through Hormuz. Iran technically built its own bypass pipeline, the Goreh-Jask line to the Gulf of Oman, back in 2021, but has barely used it since, which tells you something about how much Iran itself has historically valued having an alternative, right up until this year, when having leverage over the main route turned out to matter more than having an exit from it.
Then there’s the gas. Qatar is, on its own, responsible for the overwhelming majority of the roughly one-fifth of global LNG trade that moves through the strait, supplying buyers across Asia and Europe with fuel that, unlike oil, has almost no slack storage capacity built into most receiving countries’ systems. A prolonged interruption to LNG cargoes hits faster and harder than an equivalent interruption to crude, because LNG-importing utilities generally keep only a few weeks of buffer on hand rather than months.
The War
On February 28, 2026, the United States and Israel launched coordinated strikes on Iran under the name Operation Epic Fury, hitting military sites, nuclear facilities, and Iranian leadership. Supreme Leader Ali Khamenei was killed in the opening strikes. Iran answered with missile barrages on Israeli cities and on American bases in the Gulf, including installations in the UAE, Qatar, and Bahrain. The fighting spread to Lebanon, where Hezbollah launched rockets into Israel and drew Israeli counterstrikes in return. Within a week, on March 4, Iran declared the Strait of Hormuz closed and said it would attack any ship that tried to cross.
The IRGC backed the declaration with action. It boarded and attacked merchant vessels. It laid mines in the strait. On March 27 it went further, announcing the strait was closed to any ship headed to or from ports belonging to the United States, Israel, or their allies, which in practice meant most of the world’s shipping fleet, since insurers and flag states were not eager to test Iran’s definition of “allies.” Traffic collapsed. Britannica’s account of the period puts the drop at roughly 90 percent within days of the opening strikes, and above 95 percent once Iran made its threats explicit. At the worst point, as few as two tankers a day were still attempting the crossing, against a prewar baseline of well over a hundred. The International Maritime Organization reported in late April that about 20,000 mariners and 2,000 ships were stuck in the Gulf with nowhere to go.
The United States, for its part, blockaded Iranian ports from April 13 to May 29, adding a second layer of disruption on top of Iran’s own mining and harassment campaign. War-risk insurance premiums for ships transiting the strait, which had sat around 0.125 percent of a vessel’s insured value before the strikes, jumped to between 0.2 and 0.4 percent in the days leading up to the war and higher still once it started. For a single very large crude carrier, that is an added cost measured in hundreds of thousands of dollars, per transit, before a barrel of cargo has moved an inch.
President Trump had been warned this could happen. According to reporting on internal briefings, the Joint Chiefs of Staff told him before the February strikes that an attack on Iran could prompt Tehran to close the strait. Trump reportedly dismissed the concern, telling aides Iran would fold rather than close it, and that if Iran did close it, the U.S. military could reopen it by force. Neither prediction held up cleanly. Iran did not fold. And reopening the strait by force turned out to be a slower, messier, more diplomatically expensive project than “the U.S. military will handle it” implied. It took an internationally brokered memorandum of understanding, months of indirect talks in Doha and Islamabad, and it is still not fully resolved as of this writing.
This Has Happened Before
None of this is entirely new, which is itself an argument for taking it seriously rather than treating it as a one-off aberration. From 1984 to 1988, during the last two years of the Iran-Iraq War, the two countries fought what came to be called the Tanker War, a sustained campaign of strikes on merchant shipping in the Gulf. Iraq struck first, hitting Iranian oil terminals and tankers at Kharg Island in an attempt to cripple Iran’s oil income and, not incidentally, to provoke Iran into closing the strait entirely, which Iraqi planners hoped would drag outside powers into the fight against Tehran. Iran took the bait only partway. It struck back at tankers belonging to Iraq and to the Gulf Arab states bankrolling Iraq’s war, but according to research from the University of Texas’s Strauss Center, Iran deliberately stopped short of closing the strait outright, because its own oil-dependent economy, already battered by war, needed that water open as much as anyone’s. By the end of the fighting, Iraq had carried out more than 280 attacks on shipping to Iran’s 168, and more than 30 million tons of cargo had been damaged.
Kuwait, whose tankers took the worst of Iran’s retaliation, asked for outside protection. The Soviet Union answered first, chartering tankers under its own flag. Washington, under Reagan, followed with Operation Earnest Will, reflagging eleven Kuwaiti tankers as American vessels so the U.S. Navy could legally escort them. It became the largest naval convoy operation since World War II, and it was not a clean success story. On the first escort run, the reflagged supertanker Bridgeton struck an Iranian mine that American minesweepers had failed to detect. Three tankers hit mines in the operation’s first month alone. An Iraqi jet, in a separate incident, fired on the USS Stark and killed 37 American sailors, an attack Baghdad blamed on pilot error, which Washington used, somewhat conveniently, to justify leaning harder against Iran instead. The episode ended in tragedy rather than triumph: on July 3, 1988, the USS Vincennes mistook Iran Air Flight 655 for an attacking fighter and shot it down, killing all 290 people aboard, most of them civilians, 65 of them children. Iran agreed to a ceasefire with Iraq two weeks later.
The parallels to this year write themselves. Then as now, the fighting was between two other parties before it became a shipping crisis. Then as now, the strait itself became the weapon of choice once direct combat reached a stalemate. Then as now, mines proved to be the tactic outside navies were least prepared for, striking ships under active escort. And then as now, ending the crisis took months of a great power inserting its own ships directly into a minefield, at real cost in ships and sailors, not a clean diplomatic settlement reached from a safe distance.
There is, however, a real difference between 1988 and 2026, and it should discourage anyone hoping history simply repeats on schedule. In the 1980s, Iran was one of two exhausted combatants with every incentive to keep the strait functional for its own sake. In 2026, Iran is the party that unilaterally closed the strait as a deliberate weapon against the country that attacked it, with far less concern for its own oil income, some of which it kept moving anyway through routes and buyers willing to look past sanctions. Military technology has also moved a long way past 1988. Analysts quoted by the Associated Press and Fortune this spring pointed out that Iran’s Revolutionary Guard has spent decades adapting to sanctions by operating small, disposable civilian-looking boats, some no larger than a fishing vessel, rigged with heavy machine guns and rocket launchers, that shadow American warships through the strait as a matter of routine. Add cheap drones and short-range missiles, both far more available to Iran now than in the 1980s, and the threat facing any escort mission is harder to manage than the one Earnest Will faced. One risk analyst told Fortune plainly that securing the waterway today is harder than it was during the Tanker War, given how far small-boat and drone tactics have advanced. The U.S. Navy, for its part, decommissioned four of its dedicated minesweepers in the Gulf region just last year, according to reporting relayed by Al Jazeera, leaving a thinner mine-clearing capability than it had going into this crisis.
The lesson from 1988 was that the strait, once closed by force, gets reopened by greater force, at a cost, and life goes back to something resembling normal afterward. The lesson from 2026 looks more like this: the strait gets closed by force, reopening it takes months instead of weeks, the tools available for reopening it have not kept pace with the tools available for closing it, and the closing party has less reason than its 1980s counterpart to hand back the leverage once it has proven the leverage works.
The Law That Is Supposed to Settle This
Freedom of navigation is not just a phrase American officials use when they want a warship to go somewhere. It has a specific legal home, and understanding it explains both why the U.S. keeps insisting the strait must stay open and why Iran keeps insisting it doesn’t have to comply.
The relevant instrument is the United Nations Convention on the Law of the Sea, UNCLOS, finished in 1982 and in force since 1994, ratified by 171 countries plus the European Union. UNCLOS created the modern rulebook for who controls what water and how ships are allowed to move through it. Its central bargain, relevant here, let coastal states extend their territorial waters from 3 nautical miles out to 12, a significant expansion of sovereign control, in exchange for accepting a specific limitation on that control in straits used for international navigation: a right called transit passage. Under transit passage, ships and aircraft of every nation, commercial and military, are entitled to continuous, expeditious passage through a strait like Hormuz, and the coastal states on either side, in this case Iran and Oman, cannot suspend, condition, or impede it. That’s a materially stronger guarantee than the older, more limited standard called innocent passage, which lets a coastal state restrict or interrupt shipping under a broader set of circumstances, including its own security concerns.
Here is the complication, and it is not a small one. Neither Iran nor the United States has ratified UNCLOS. Iran signed it in 1982 but declared at the time that it would only apply the transit passage regime to countries that had themselves ratified the treaty, treating it as what legal scholars call a package deal rather than a standing obligation. Since the U.S. never ratified either, Iran considers itself free to fall back on the older, weaker 1958 Geneva Convention on the Territorial Sea, or on innocent passage more broadly, when dealing with American shipping. The United States, for its part, never ratified UNCLOS mainly over disputes about deep-seabed mining provisions that have nothing to do with the Gulf, but has spent decades arguing that the transit passage rule reflects binding customary international law regardless of formal ratification, a position first staked out under Reagan and enforced ever since through the Navy’s Freedom of Navigation Program. Most international law scholars and legal analysis of the current crisis, including reporting from Chatham House and legal commentary in The Nation, lean toward agreeing with the American position, on the theory that a rule this widely accepted for this long binds everyone whether or not they signed the paperwork. Iran disputes this directly, invoking its long-standing status as what’s called a persistent objector, a country that raised its objection early and has kept raising it consistently enough that even scholars who think transit passage is now customary law generally concede Iran gets an exemption from it.
The upshot is that the freedom of navigation the U.S. insists on, and that the rest of the trading world depends on without ever thinking about it, rests on a body of law neither of the two central antagonists has formally accepted, enforced through customary practice and naval presence rather than through any court either side recognizes as having jurisdiction over it. States that haven’t ratified UNCLOS can’t be hauled before the International Tribunal for the Law of the Sea. There is no binding referee. When the UN Security Council tried to act on this directly in April, with a resolution condemning Iran’s regulation of the strait and authorizing member states to intervene militarily to reopen it, Russia and China vetoed it. A separate, less confrontational resolution condemning Iran’s actions did pass with support from roughly 140 member states, a real diplomatic rebuke, but a rebuke with no enforcement mechanism attached. That is the structural problem in miniature: the rule the whole global economy quietly depends on is real, widely recognized, and almost certainly correct as a matter of law, and it is also, in practice, unenforceable against a determined objector without someone’s navy doing the enforcing directly, at the cost and risk already described.
This matters for the argument this piece is making, not as a legal footnote but as the clearest illustration of it available. Freedom of navigation through Hormuz isn’t propped up by an international court, a treaty both sides accept, or an institution with real teeth. It’s propped up by American naval power and by the general reluctance of most states to test it, both of which turned out this year to be less absolute than assumed. A guarantee that depends entirely on one government’s navy showing up, backed by a legal theory the other party has spent forty years formally rejecting, was never the kind of guarantee that holds indefinitely. It held for decades because nobody with the will to test it also had the willingness to absorb the cost of testing it. Iran, in 2026, decided the cost was worth it anyway.
Iran’s Refusal to Let Go
This is the part of the story that should worry anyone who assumed the strait would snap back to normal once the shooting stopped. It hasn’t, and Iran does not appear to want it to.
The pattern started early. On April 1, Trump claimed Iran had asked for a ceasefire and said the U.S. would consider it once the strait was, in his words, open, free, and clear. Iran’s foreign ministry called this false. The IRGC was blunter, stating the strait would not be reopened through what it called a ridiculous spectacle staged by the American president. A ceasefire process eventually took shape through Pakistani mediation, with Iran reportedly losing track of some of its own mines while trying to clear a safe channel, according to reporting from NDTV. A memorandum of understanding was finally signed in June, with Trump reportedly putting his signature to it while at the G7 summit in France. It bought sixty days to work out the details. It did not settle the underlying question of who controls passage through the strait.
Iranian officials have been explicit since the ceasefire that they intend to charge a transit fee once the sixty-day window closes, according to the Council on Foreign Relations. Oman may join in collecting it. This is worth sitting with for a second. The declared American position is freedom of navigation, full stop, the transit passage guarantee described above, the same principle the U.S. Navy has enforced in the Gulf for decades. Iran’s position, stated openly by its own negotiators, is that ships will be allowed through, on Iranian terms, for a price Iran sets. Those are not two versions of the same deal. They are two different regimes for who owns the water, and one of them is the regime Iran has spent forty years formally declining to accept.
Iran has already shown what that looks like in practice, and it arrived faster than the sixty-day window even implied. Days after the Islamabad memorandum took effect in mid-June, reopening the strait to commercial traffic, Iran’s Persian Gulf Strait Authority issued binding rules requiring every commercial vessel transiting Hormuz to carry a new category of government-approved hull war insurance, coverage the authority itself would sell. Shipping lawyers quoted in trade press called the requirement a direct violation of the unimpeded-passage guarantee under UNCLOS Article 44, since it amounts to exactly the kind of prior authorization and conditional access that transit passage is supposed to rule out. The insurance was offered free for the moment, but the authority’s own published terms reserved the right to start charging later, and the U.S. Treasury had designated that same authority as an IRGC-linked entity in late May, which means paying it, even for free coverage today, sets up American and allied shippers for a sanctions violation the moment a fee gets attached. In other words: Iran built a mechanism that looks, on paper, like ordinary maritime insurance, but functions as a toll booth with a built-in sanctions trap for anyone who uses the alternative, and it built this mechanism inside the supposedly free sixty-day window the ceasefire was meant to guarantee.
Iran has kept demonstrating that it can enforce its version whenever it wants to. Traffic did recover somewhat through June, helped along by the interim deal and a genuine, if partial, cooling of tensions. Brent crude fell from a March 31 peak near $104 a barrel to under $73 by the end of June, the steepest quarterly drop since the pandemic, as markets priced in the reopening. But the recovery was fragile by design, resting entirely on Iran’s continued willingness to permit it, and Iran kept reminding everyone of that fact. Iranian state media reported a foreign container ship running aground in early July after ignoring Tehran’s designated route, an incident state broadcasters were not shy about using to underline who was still setting the terms. On July 6 and 7, after the U.S. resumed strikes on Iran in response to earlier ship attacks, the IRGC hit at least two commercial vessels in the strait with missiles, a Qatari-flagged LNG carrier and a Saudi-flagged crude tanker among the reported targets. Iran’s own television reported the attack on the LNG vessel had been provoked by the ship ignoring warnings, without Tehran officially claiming responsibility. Even so, traffic data from the tracking firm Kpler showed the strait had not collapsed the way it had in March, logging over a hundred verified crossings across a single weekend even after the missile strikes, evidence that shippers have adapted to operating under continuous risk rather than evidence that the risk is gone.
None of this reads like a country planning to relinquish control of the strait once the paperwork is signed. It reads like a country that discovered, in the space of a few months, that it holds genuine leverage over the global economy and intends to keep some of that leverage regardless of what any memorandum says. Iran’s negotiators have reportedly refused to put its missile arsenal or its regional militia network on the table as part of any settlement, according to CNN’s reporting on the talks, treating both as non-negotiable. A country that will not disarm its missiles is not a country likely to permanently disarm its chokepoint.
There’s a related pattern worth naming, because it shapes how much weight to put on any eventual paper agreement. Iran has spent years building a so-called dark fleet of tankers, ships with disabled tracking transponders, flags of convenience, and ownership structures designed to obscure who is actually moving the cargo, in order to keep exporting oil around Western sanctions. That infrastructure, built over years to evade one set of rules, is precisely the infrastructure a government would keep on hand if it wanted to preserve the option of selectively enforcing, taxing, or blocking passage through the strait regardless of what any American-brokered memorandum says on paper. A country that has already built the tools to move oil quietly around a rules-based system has also built the tools to control access to that system on its own terms when it suits it. Nothing about the ceasefire dismantles that fleet or that infrastructure. It just sits there, available for the next round of leverage.
To be fair to the other side of this argument: talks are, as of this writing, still officially alive. Qatari and Pakistani mediators describe the process as making positive progress. Nobody involved has declared it dead. It’s possible a durable arrangement gets signed that restores something close to normal transit. But “possible” is not the same as “priced in,” and the mine-laying, the missile strikes on tankers, the running port harassment, and the open talk of a transit fee are not the behavior of a party negotiating from a position of eventual full compliance. They are the behavior of a party negotiating from a position of leverage it plans to keep using.
What It Cost, and Who Paid
The New York Times ran the numbers on winners and losers between the war’s start and early May, comparing shipments of oil and fuel against the same period a year earlier. The United States came out ahead by roughly $50 billion in additional export revenue. Russia gained more than $15 billion, on steady export volumes at higher prices. Every Arabian Gulf producer, without exception, saw export volumes fall. Among them, the ones with a way around the strait did better than the ones without. Saudi Arabia, which can push oil overland to the Red Sea, and Oman, which sits on the strait’s open-ocean side by simple geography, saw revenue increase even as volume fell, because higher prices more than made up the difference. Iraq, Kuwait, Qatar, and the UAE, all boxed in with no pipeline alternative, saw both volume and revenue drop. Iran, oddly, saw revenue increase too, in part because it kept moving its own oil even while blocking everyone else’s, a detail worth remembering the next time someone describes the closure as pure self-sacrifice on Iran’s part.
The container trade took its own hit. About 33 million twenty-foot containers move through the Gulf every year to ports across the UAE, Saudi Arabia, Kuwait, Qatar, and Bahrain, a small slice of global container volume by percentage but a critical one for the region, mostly because of Dubai’s Jebel Ali port, which reroutes cargo across East Africa and South Asia. By early March, tracking firm Kpler counted more than 130 container ships trapped inside the Gulf and another 62 waiting outside the strait, unwilling to enter. When a transshipment hub like Jebel Ali stalls, the disruption doesn’t stay local. It shows up in shipping schedules and warehouse shelves well outside the region.
The price swings tell their own story about how fragile the calm actually was. Brent crude, sitting around $70 a barrel before the February strikes, spiked as high as $119 during the worst of the open fighting in March and April, an increase of roughly 71 percent in a single quarter, according to FactSet data cited by CNN. It then fell back below $73 by the end of June as the interim ceasefire held and traffic partially recovered, the steepest quarterly drop since the pandemic. Even after that drop, a Reuters-referenced spike as talks frayed again in early July pushed Brent back over $106 a barrel for a stretch, according to Al Jazeera’s reporting, while a naval skirmish was still playing out in the strait even with a ceasefire nominally in effect. A commodity that can swing 70 percent in one direction and 40 percent in the other over the course of four months, based entirely on whether one government’s paramilitary force feels like mining a waterway that week, is not a stable input for any economy to plan around, no matter which side of the trade a given country sits on.
The insurance market absorbed its own version of the shock. War-risk premiums, which sat around 0.125 percent of a vessel’s insured value before the war, are the kind of number that looks trivial until you multiply it across a fleet of supertankers making repeated transits, at which point it becomes a meaningful line item in the cost of every barrel that reaches a refinery. Reporting from the period described some shippers negotiating directly with the IRGC for safe passage, at costs reported as high as $2 million per vessel at the war’s peak, a de facto private toll levied by an armed force rather than a state customs agency, and a preview of what a formalized transit fee regime might look like in practice. Shippers who paid that toll once, and lived, are not likely to assume it won’t be demanded again.
Diplomatically, the closure pulled in players with no direct stake in the U.S.-Israel-Iran fight. Australia’s navy chief said in April his forces were ready to help reopen the strait if ordered. Canada issued a statement backing open passage. China, which depends on the strait for a third of its oil, had its own leader personally lobby Saudi Arabia’s crown prince on keeping it open, an unusually direct intervention from Beijing on a security matter outside its own region, and a sign of how little patience China has for a chokepoint problem that hits its own economy this hard. India’s foreign ministry, for its part, welcomed the eventual ceasefire and pressed publicly for unimpeded trade through the strait, a notably direct statement from a government that usually prefers quiet diplomacy on matters involving both Iran and the United States. The United Kingdom hosted a fifty-country conference on reopening the strait in late April and later sent drones, fighter aircraft, and a warship to join an international protection effort. None of these countries had a vote in why the war started. All of them had a stake in how it ended, because all of them depend on water they do not control.
That last point is worth dwelling on, because it is the whole argument in miniature. Fifty nations sending representatives to a conference about reopening a strait none of them administer is fifty governments admitting, in effect, that their own economic stability rests on a decision made by a country actively at war and a paramilitary force answerable to no one outside Tehran. A functioning international system is not supposed to leave that many countries with that little say over something that important. It did here, because it was built that way decades ago and nobody had the occasion to notice how brittle the arrangement was until this spring forced the issue.
Why It Will Not Go Back to What It Was
There’s a temptation, once a ceasefire holds and tanker traffic climbs back toward its old numbers, to treat the crisis as closed and file it under “resolved.” That would be a mistake, for a few concrete reasons.
First, the pricing of risk does not reset just because the shooting stops. Insurers who watched premiums spike to several times their prewar level, and who paid out on tankers actually hit by missiles and mines, do not forget that experience the next time they write a policy for a Gulf transit. Lloyd’s of London did the same thing after the 1980s Tanker War, and Gulf war-risk premiums never fully returned to their pre-1984 baseline even once that conflict ended; underwriters simply built the memory of mined shipping lanes into how they priced the region from then on. There is no reason to expect a different outcome this time, and every reason, given how much more recent and more visually documented this year’s attacks have been, to expect the adjustment to be larger and more durable. Higher baseline war-risk premiums are likely to be a permanent fixture of shipping through Hormuz going forward, a quiet, ongoing tax on global trade that shows up in fuel prices without ever making headlines again.
Second, Iran’s stated intent to charge a transit fee, if it holds, would formalize something the U.S. Navy has spent decades and considerable expense trying to prevent: an Iranian toll booth on international waters. Even a partial version of that arrangement, even one applied selectively, changes the character of the strait from an international waterway policed by norms and naval presence into a corridor where one riparian state extracts rent by threat of force. That is a durable shift in who holds power over the passage, regardless of how the current negotiations are formally described.
Third, buyers remember. China and India built substantial strategic reserves in the run-up to the war, after warning signs accumulated through 2025, and both countries have spent the months since diversifying supply contracts toward producers reachable without crossing the strait, including U.S. Gulf Coast exports and West African crude. Some of that diversification will unwind if things stay calm for a few years. Not all of it will. Once a buyer builds a second source of supply, the second source tends to stick around even after the first source becomes reliable again, because nobody wants to be caught flat-footed twice.
Fourth, and most simply, everyone involved now has direct, recent, personal evidence that the strait can be shut, that shutting it works as a weapon, and that reopening it is not a matter of American resolve alone. Trump was reportedly told this could happen and reportedly assumed it either wouldn’t, or that U.S. force would fix it quickly if it did. Neither assumption survived contact with events. That lesson doesn’t un-teach itself. Every government with oil flowing through Hormuz, and every government buying it on the other end, now knows the chokepoint is real leverage in Iranian hands, not a theoretical one. That knowledge changes long-term planning in Riyadh, Doha, Beijing, and New Delhi whether or not the current ceasefire holds.
Fifth, the war appears to have pushed the Gulf Arab states themselves toward quiet hedging against Iran rather than toward closer alignment with Washington, according to analysis from the Council on Foreign Relations. Few of the Gulf states wanted this war in the first place, and many came away from it more worried that the United States had, in the process of fighting Iran, inadvertently strengthened Iran’s hand over the one resource every Gulf economy depends on. A regional hedge in that direction, non-aggression arrangements between individual Gulf states and Tehran, quieter diplomatic channels that don’t run through Washington, is a rational response to watching the strait get used as a weapon and watching the American security guarantee take months to restore even partial normalcy. It is also a sign that the old assumption, that the U.S. security umbrella over the Gulf is dependable enough to plan an entire regional economy around, took real damage this year regardless of how the current negotiations conclude.
The Navy Cannot Simply Fix This Again
There’s a comforting story available to anyone who wants to believe the strait will eventually return to full normal, and it goes like this: the U.S. Navy handled the Tanker War in the 1980s, it can handle this one too, and once American resolve is fully applied, the chokepoint problem goes away. The reporting from this spring does not support that story.
Torbjorn Soltvedt, an analyst with the risk intelligence firm Verisk Maplecroft, told Fortune in April that securing the strait today is harder than it was during the Tanker War precisely because asymmetric tactics have advanced so much further than the countermeasures built to stop them. Tom Duffy, a former U.S. Navy officer who served during Operation Earnest Will and later spent decades in the Foreign Service, made a related point to the Associated Press: the goals of the 1980s operation were narrow and clearly defined, protect specifically reflagged tankers, while the goals of the current conflict have sprawled into what he described as a kaleidoscope of maximalist aims, regime change among them, that make a clean, bounded naval mission much harder to design. An escort mission only works if everyone agrees on what it’s protecting against and how far it’s allowed to go. Nobody currently agrees on either.
The hardware gap matters too. Iran’s Revolutionary Guard has spent years normalizing the use of small, cheap, deniable platforms, fishing-boat-sized craft with machine guns bolted to the bow, backed now by inexpensive drones and short-range missiles that did not exist as a serious threat category in 1988. Meanwhile the U.S. Navy, per reporting relayed through CNN and Al Jazeera, decommissioned four of its dedicated minesweepers assigned to the Arabian Gulf region only last year, leaving a thinner specialized mine-clearing force than the one that struggled to keep pace with Iranian mines forty years ago. Add to that the fact that Iran itself has, by its own admission relayed through state media, lost track of some of the mines it laid this year while trying to clear a path for its own negotiated shipping lanes. A strait that even the country doing the mining can’t fully account for is not a strait any navy can declare clean on a fixed schedule, American promises notwithstanding.
None of this is an argument that the U.S. Navy is incapable or that escort operations are pointless. Operation Earnest Will did eventually work, at real cost, over roughly fourteen months. It’s an argument against treating “the Navy will handle it” as a substitute for reducing exposure to the problem in the first place. A security guarantee that takes over a year to make good on, against an adversary with better weapons than it had the last time, is not the kind of guarantee a global economy should be content to rest a fifth of its energy supply on indefinitely.
The Other Chokepoint
Hormuz is not the only stretch of water this argument runs through, and treating it as an isolated crisis misses how much of the same story has been playing out, quietly, at the other end of the Arabian Peninsula. About 1,300 miles southwest of Hormuz sits the Bab el-Mandeb, a strait barely 18 miles wide at its narrowest point, connecting the Red Sea to the Gulf of Aden and, through it, the Suez Canal to the Indian Ocean. Before any of this year’s fighting started, something like 10 percent of global seaborne trade moved through the Red Sea corridor, most of it container traffic and a meaningful share of oil headed to Europe. If Hormuz is the drainpipe for Gulf energy, the Bab el-Mandeb is the drainpipe for the shortest sea route between Asia and Europe. Lose it, and a container ship either takes its chances or adds roughly 11,000 nautical miles and ten days to its voyage by going around the Cape of Good Hope, at an added fuel cost of around a million dollars per trip.
Iran-backed Houthi forces in Yemen started doing exactly that math for shippers back in November 2023, launching missiles and drones at vessels they associated with Israel in solidarity with the war in Gaza, then widening the target list to any ship whose owner, operator, or corporate family had called at an Israeli port. According to the Armed Conflict Location and Event Data Project, the Houthis attacked 178 vessels over roughly two years of the campaign, sinking four ships and killing nine sailors. The worst of it came in July 2025, when Houthi forces sank the bulk carriers Magic Seas and Eternity C off Hodeidah, killing four seafarers between the two sinkings. The economic ripple was enormous even before this year’s war touched the region: the Russell Group estimated roughly $1 trillion in goods were disrupted by Houthi attacks between October 2023 and May 2024 alone, monthly transits through the Suez Canal fell from over 2,000 ships to under 900, and by early 2025 something close to half of all vessels bound from Asia to Europe were routing around Africa rather than risk the Red Sea at all.
When the U.S. and Israel opened their war on Iran this February, the obvious question was whether the Houthis would fully reopen this second front. They mostly didn’t, and the reason is instructive. The Houthis are also fighting their own long-running civil war inside Yemen and, per reporting picked up by Wikipedia’s tracking of the crisis, were reluctant to stretch themselves across multiple simultaneous fights even while making supportive statements about Iran and firing at least one ballistic missile at Israel in late March. They warned repeatedly that a full Bab el-Mandeb closure was “likely” if the war escalated sharply or if Gulf Arab states joined it directly, a threat that functioned as much as leverage as commitment. Even short of a full closure, the threat alone was enough: shipping through the strait stayed well below its already-depressed prewar volume straight through the spring, and a standing U.S. maritime advisory covering the Red Sea, the Bab el-Mandeb, the Gulf of Aden, the Arabian Sea, and the Somali Basin, reissued in March 2026 and still in effect as of this writing, warns that vessels flying flags or carrying corporate links tied to Israel remain live targets. Strikes on the merchant vessels Tavvishi and Norderney in the Gulf of Aden in early June, months after the main Iran war had nominally quieted down, showed the threat was never theoretical to begin with. Houthi leadership called the eventual U.S.-Iran ceasefire a victory for what it termed the Axis of Resistance, while explicitly reserving the right to resume full attacks depending on how things developed.
There’s a second-order consequence to all of this that gets less attention than the missile strikes themselves, and it matters just as much for the argument this piece is making: Somali piracy is back. For roughly the past decade, the naval task forces built to suppress piracy off the Horn of Africa, the European Union’s Operation Atalanta and the multinational Combined Task Force 151 among them, had mostly succeeded, to the point that shippers had grown comfortable treating the threat as a closed chapter. Once the Houthi campaign began in late 2023, those same naval assets and the intelligence and surveillance capacity that supported them got pulled toward the Red Sea and the Bab el-Mandeb, where the more urgent, higher-profile threat to shipping and to Western warships was unfolding. That left a thinner security presence off Somalia at precisely the moment traffic patterns shifted, with more vessels diverting around the Cape of Good Hope and passing closer to the Somali coast than they had in years.
Pirate action groups based in Puntland noticed. By spring 2026, according to reporting picked up by Deutsche Welle and Cyprus Mail, three vessels, the tankers Honour 25 and Eureka and the cargo ship Sward, had been hijacked off Somalia and nearby Yemen within a span of weeks, with 44 seafarers held captive across the three ships and the International Maritime Organization publicly calling for their release. The pirates are, by multiple accounts, considerably better resourced than the last generation that operated in these waters. Analysts at the risk consultancy Castor Vali describe pirate groups using hijacked dhows as motherships, extending their operational range to as far as 900 nautical miles offshore, equipped with GPS, satellite communications, and functioning ransom-negotiation infrastructure on land. A United Nations Panel of Experts assessment, cited by multiple outlets covering the region, went further, describing a transactional arrangement in which the Houthis have supplied weapons and training to the al-Shabaab militant network in exchange for al-Shabaab facilitating and brokering piracy operations along the Puntland coast, a genuinely strange alliance across the Sunni-Shia divide held together by the fact that both sides profit from instability in the same stretch of water. Add in a separate policy shift, a sharp cut to U.S. non-security development aid to Somali coastal communities under the current administration, and the old toolkit for keeping young men out of pirate crews has weakened at the same time the naval toolkit for stopping them once they’re at sea has thinned out.
None of this is a coincidence, and none of it is unrelated to the Hormuz story. It is the same underlying pattern, playing out on a second chokepoint at the same time: a state actor, Iran through its Houthi proxy, discovers that threatening a narrow stretch of water produces outsized leverage over global trade at relatively low cost, and the international response, built for a calmer decade, turns out to have too few ships and too little coordinated authority to cover more than one crisis at a time.
This is where a piece of now-defunct infrastructure is worth naming directly, because it was built for exactly this compound problem and no longer exists to handle it. In 2019, after a string of tanker attacks and seizures in the Gulf widely attributed to Iran, the United States assembled a coalition called the International Maritime Security Construct, known operationally as Coalition Task Force Sentinel, headquartered in Bahrain and built around U.S. Naval Forces Central Command and the Navy’s 5th Fleet, with naval assets contributed by partner nations including the United Kingdom, Australia, Saudi Arabia, the UAE, Bahrain, Albania, and later a run of Baltic and other states. Its stated mission, in the words of the officers who stood it up, was to deter state-sponsored malign maritime activity and reassure the merchant shipping industry across precisely the two chokepoints this article has spent the most time on: the Strait of Hormuz and the Bab el-Mandeb, along with the wider Arabian Gulf, Gulf of Oman, Gulf of Aden, and southern Red Sea. It worked by pooling large coalition warships to watch the choke points directly, smaller patrol vessels to cover the water between them, and constant maritime awareness communication with the merchant fleet passing through, all under a shared coalition headquarters rather than any single nation’s flag. By the account of the officers who built it, the arrangement produced a real, measurable drop in state-sponsored attacks on merchant shipping in the years after it stood up.
Operational command of the coalition’s task force was eventually handed over to the Royal Saudi Naval Force, a transition that put a Gulf Arab country, rather than the United States or the United Kingdom, in the seat that had run day-to-day coordination since the coalition’s founding. In the years that followed, the construct was wound down, and the dedicated coalition mechanism built specifically to counter state-sponsored malign activity across both Hormuz and the Bab el-Mandeb at once no longer exists in the form it once did. That is a strange thing to have happened right before both chokepoints turned into live crises simultaneously, one closed by direct Iranian military action, the other kept in a state of chronic low-grade siege by an Iranian proxy, with a piracy resurgence opening up in the gap the naval reshuffling left behind. Whatever the reasoning behind handing the operational lead to Saudi Arabia and subsequently standing the coalition down, the practical result is that the one institution purpose-built to treat Hormuz and the Bab el-Mandeb as a single, coordinated maritime security problem was not there when both of them needed it at the same time.
A Structural Problem
Here is where the diagnosis needs to widen. The standard framing of this crisis treats it as a failure of diplomacy, or a failure of deterrence, or a failure of whichever administration happened to be making the calls when the missiles started flying. Those framings aren’t wrong, but they miss the deeper design flaw, which is this: the global economy built a single, unavoidable bottleneck for a fifth of its energy supply, routed it through a country actively hostile to the parties depending on it, and then treated the arrangement as stable because it had worked, more or less, for several decades.
That was never a resilient system. It was a system that worked until it didn’t, propped up by the assumption that no one would actually pull the trigger on a closure this costly to everyone, including Iran. 2026 answered that assumption. The strait can be closed. It has been closed. The country doing the closing does not appear inclined to fully give up the leverage, even under direct military pressure and a signed ceasefire. A system with one point of failure that large, sitting inside the territory of a government with every incentive to use it as a weapon, is not a system anyone should want to depend on more than they have to.
This is where the fix stops being a matter for the State Department and starts being a matter for everyone downstream of the pipeline, which is to say, everyone. The reflexive answer to a supply shock like this is more government: a bigger strategic petroleum reserve, more naval escorts, another round of sanctions, another administration promising to secure the region once and for all. Some of that may be necessary in the narrow, genuinely coercive sense, keeping sea lanes open against armed threats is closer to the legitimate core of government than most of what governments actually spend their time on. But “the Navy keeps the strait open” has been the plan for fifty years, and the plan just got tested and came up short for months at a stretch. Betting the next fifty years on the same plan working better next time is not a serious strategy. It’s a hope dressed up as a strategy.
It also mistakes the level at which the actual failure occurred. The failure this spring wasn’t that the U.S. government lacked resolve, or lacked ships, or lacked allies willing to show up to a conference in London. The failure was structural: too much of the world’s daily functioning had been quietly wired through one 21-mile channel, and nobody with the power to change that wiring had much incentive to do so while the channel stayed open. Fixing that after the fact with a bigger reserve and a bigger fleet treats the symptom. It doesn’t touch the underlying design choice, which was letting one government’s paramilitary force hold effective veto power over a fifth of the planet’s energy trade in the first place. That design choice gets made again, quietly, every year that passes without anyone downstream doing something to reduce their own exposure to it.
Building the Alternative
The honest answer is not “trust the next administration to manage the Gulf better.” It’s reducing how much the ordinary functioning of daily life depends on a strip of water controlled, in practice, by whoever is willing to mine it.
Some of that work is already happening, driven not by federal mandate but by plain self-interest at the level of companies, utilities, and communities. Domestic U.S. oil and gas production has grown enough over the past fifteen years that America’s own direct exposure to a Hormuz closure is now a rounding error, well under 10 percent of crude imports even before the war, a fraction of what it was in the 1970s. That shift happened because private firms found it profitable to drill differently, not because Washington decided the country needed less Gulf oil. It’s a useful model for the rest of the fix: resilience built by people with something to lose, not resilience mandated from a committee room.
The same logic applies at smaller scale. A household, a business, or a town that generates a meaningful share of its own power, through rooftop solar, a local cooperative, distributed natural gas turbines, or in the longer run small modular nuclear, is not waiting on a tanker that has to cross a minefield to keep the lights on. A community that has invested in local fuel storage, in weatherization, in genuinely diversified regional suppliers instead of a single low-cost import contract, absorbs a price shock like the one this spring without missing a bill. None of this requires a new federal energy program. It requires the same instinct that built volunteer fire departments and mutual aid societies long before anyone thought to ask government to do it for them: don’t wait for the distant institution to guarantee your supply chain when you can build a shorter, sturdier one yourself.
Credit unions and community development financial institutions have quietly been doing a version of this for decades in the money supply, keeping capital local and accountable instead of routed through institutions with no stake in the outcome if it goes wrong. Energy security could stand to borrow the same instinct. A cooperative that owns its own generation and storage, answerable to the members who depend on it, is not exposed to a decision made by the IRGC in a Doha hotel room. A national grid dependent on imported fuel routed through a single foreign-controlled strait is exposed to exactly that, and has now proven it.
Worth separating out here is the difference between the two levels at which “less dependent” actually operates, because they call for different institutions. The first level is national: refining capacity, the Strategic Petroleum Reserve, domestic production, and pipeline infrastructure that lets the largest oil producers bypass the strait entirely. Keeping sea lanes navigable for commerce, and maintaining the reserve as a genuine buffer against a supply shock, sits closer to the legitimate core of what government exists to do, alongside courts and physical security, than most of what federal agencies actually spend their budgets on. There’s a real argument for that reserve staying well stocked and well managed, rather than drawn down for short-term political convenience the way it has been in past administrations. That is a narrow, defensible role, and it’s worth saying so plainly rather than pretending every government function related to energy is equally illegitimate.
The second level, and the one that gets neglected precisely because the first one exists, is everything below the national reserve: the household, the business, the town, the region. This is where waiting on Washington becomes a habit rather than a necessity. A manufacturer that keeps sixty days of fuel on-site instead of relying on just-in-time delivery isn’t doing it because a federal mandate told it to. It’s doing it because the owner watched a tanker get hit by a missile in April and decided the math on carrying extra inventory had changed. A rural electric cooperative that invests in local battery storage and a mix of wind, solar, and gas peaking capacity isn’t executing a climate policy. It’s doing what mutual, member-owned utilities have always done: building buffer against the day the far-off supply gets interrupted, because the people making the decision are the same people who lose power if they guess wrong. That is the difference between an institution accountable to the people it serves and one accountable to a budget cycle and a news cycle.
This is also where the instinct that built volunteer fire departments, granges, and mutual aid societies translates directly. None of those institutions waited for a state agency to decide a town needed fire protection or crop insurance before organizing to provide it. They organized because the people exposed to the risk were the ones best positioned to see it clearly and best motivated to solve it durably, without waiting on a distant office to notice the problem existed. Energy resilience is the same kind of problem. The Gulf states that avoided the worst of this spring, Saudi Arabia with its pipeline to the Red Sea, the UAE with its Fujairah terminal, didn’t build those routes because Washington told them to diversify. They built them because they had already learned, from decades of living next to Iran, that a single chokepoint was a liability they controlled and Iran didn’t. Households, businesses, and towns far from the Gulf can apply the identical logic at a smaller scale: don’t hand your fate to a waterway you have no vote over, when a local backup, however partial, is within reach.
None of this means autarky, and none of it means pretending global trade in energy will or should disappear. Trade through Hormuz will keep happening, because the alternative, moving 20 million barrels a day some other way, doesn’t exist at scale. The point isn’t zero dependence. The point is proportion. A country, a company, or a household that treats the strait as one source among several, buffered by storage, diversified suppliers, and local generation, rides out a closure. One that has built its whole plan around the strait staying open forever gets the kind of spring this year just delivered: price shocks, stranded ships, and a government that discovered its guarantees were worth less than advertised.
The same logic applies to the shipping routes themselves, not just the energy moving through them. A retailer or manufacturer that has spent the past two years building a second supply chain that doesn’t route through the Bab el-Mandeb, even at a real cost premium, was in a far better position this spring than one that treated the Suez shortcut as permanent. The container lines that quietly kept a Cape of Good Hope option warm through 2024 and 2025, even while it cost them time and fuel, were the ones with somewhere to go when Hormuz seized up too and both of the region’s major chokepoints turned hostile in the same calendar year. That is the whole resilience argument in one sentence: the backup route that looks wasteful in a calm year is the one that saves you in a bad one, and nobody hands you that backup route for free. You build it, or you do without it when the water closes.
The Lesson
The Strait of Hormuz is not going to feel the same again to anyone who was paying attention this year. Not to the shipping insurers who now price war risk as a permanent line item instead of a rare exception. Not to the Asian buyers who spent 2026 discovering how fast a fifth of their oil supply can vanish. Not to the Gulf states without a pipeline alternative, who learned exactly how much their economic fate depends on a country that just spent months proving it will use the strait as a weapon rather than surrender it as a formality. And not to the American public, who watched a Joint Chiefs warning about exactly this scenario get waved off, watched the warning prove accurate, and are now being asked to trust that the next guarantee will hold better than the last one did.
It won’t, necessarily. Maybe the current talks produce a lasting deal. Maybe Iran backs off the transit fee. Maybe the strait settles back into something resembling its old rhythm for another decade or two before the next crisis. History gives some reason to expect exactly that kind of uneasy, temporary calm; the Tanker War also ended in a ceasefire, and shipping through the Gulf did eventually resume something like its old volume. But “eventually resumes” is not the same as “goes back to what it was.” Insurance premiums stayed elevated for years after the 1980s fighting stopped. Navies kept a heavier permanent presence in the Gulf from then on. Nobody who lived through it treated the strait as a simple, guaranteed artery again, and the people who ran shipping companies, oil majors, and national reserves built that caution into how they operated for a generation afterward. There is no reason to expect this year’s crisis, fought with better weapons and covered in far more real-time detail, to fade any faster.
None of that changes the structural fact underneath all of it: a fifth of the world’s oil and gas passes through water controlled, in practice, by a government hostile to most of the people depending on that oil and gas, and there is no version of diplomacy that permanently removes that fact from the table. Signing a memorandum doesn’t unmine a strait. It doesn’t unlearn a lesson the IRGC just spent months teaching everyone downstream: that this water is a weapon, that the weapon works, and that the price of using it, so far, has been survivable for Tehran. The only durable answer to a lesson like that is depending on it less, one household, one utility, one community at a time, built by the people who actually bear the cost when the water closes, not promised by the people who happen to be in office when it does. Governments will keep negotiating over the strait because that is what governments do. The rest of us would do well to spend less time waiting on the outcome.