The Strait of Hormuz has been thrust into the center of the U.S-Israeli war with Iran, as the nearly two-week-long conflict has threatened significant levels of global shipping of oil and gas, disrupting energy markets worldwide.
The Strait of Hormuz, which separates the Persian Gulf from other marine passageways for energy production, is considered one of the most crucial waterways for global energy trade.
“If you think of the Strait of Hormuz in terms of our circulatory system, it’s like shutting down the aorta. You’re going to have a heart attack,” Rystad Energy chief economist Claudio Galimberti previously told the Washington Examiner.
“If it goes on for too long, and probably three or four days is enough for the market, for the oil and gas market to have a heart attack,” Galimberti said. “Which would mean, basically, price is going up much more than they do right now.”
The dilemma
The Strait was effectively shut down by the Islamic Revolutionary Guard Corps at the start of the month in the immediate response to U.S.-Israeli strikes on Iran.
Roughly 20 million barrels of crude oil and other oil products pass through the strait daily, equivalent to 20% of global oil demand.
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Since the war began, traffic has dropped by roughly 97%, according to United Nations data.
While typically more than 100 vessels pass through the narrow waterway each day, only a few dozen have been able to cross over the last week and a half.
Clayton Seigle, a senior fellow at the Center for Strategic and International Studies’ Energy Security and Climate Change Program, described this flow as a “tiny trickle.”
“Definitely nothing like the sizable fraction of the pre-war flows are reported to be moving right now,” he told the Washington Examiner, adding that nearly all of the tankers that have loaded oil in the Persian Gulf in the last 10 days have been stuck in the Gulf.
On Tuesday, Windward, a maritime intelligence platform, found that there were only two vessel crossings through the strait.
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This significant disruption to global oil and natural gas trade has sent international and domestic benchmarks soaring. Leading up to the start of the war, crude oil prices were around $70 per barrel, with Brent Crude selling at $72 and West Texas Intermediate at $67.
Prices have since surged by around 30%, hitting a record high of $119 per barrel earlier in the week. These prices have fallen slightly in recent days as nations have discussed releasing crude oil reserves into the market.
On Wednesday, members of the International Energy Agency agreed to release a record 400 million barrels from stockpiles, though it remains to be seen how quickly these reserves will be released daily.
The crude oil disruptions have had a significant ripple effect throughout the global economy, putting upward pressure on gasoline prices at home. Crude oil is the largest component of the retail price of gasoline, accounting for around 50%.
As of Wednesday, the national average price of gasoline hit $3.594 per gallon, the highest since May 2024, according to GasBuddy. Diesel prices are also staying well above the $4 line, hitting $4.81 per gallon, the highest since December 2022.
Even if oil flows were to resume and reach normal levels in the coming weeks, some analysts warn that gasoline prices won’t return to levels seen before the war in Iran until mid-2027, complicating President Donald Trump’s campaign promise to slash prices at the pump.
Trump’s solution
Trump has broadly dismissed concerns about the market reactions to the Strait of Hormuz disruptions, describing high oil prices as a “small price to pay” for greater “peace.”
Though, as the situation prolongs, he has expressed interest in taking a heavier hand in ensuring normal energy flows.
On Monday, the president told CBS News that the United States “could do a lot” about the Strait of Hormuz and threatened Iran with stronger attacks if the country moves to further block vessels from transiting through.
At the time, Trump told the outlet that he was “thinking about taking it over.”
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It remains unclear what a U.S. takeover of the Strait could look like, though it would most likely include a long-term military presence in the region.
So far, all the administration has floated is a U.S. Navy presence to escort oil and gas tankers through the waterway.
Trump detailed this offer in a plan unveiled last week to restart energy flows. He said the U.S. government would offer financial and logistical assistance, including offering political risk insurance for ships.
The Trump administration has not yet had any navy ships escort a tanker through the Strait, though that was put into question earlier in the week.
On Tuesday, Energy Secretary Chris Wright posted on X that the Navy had escorted a ship through the Strait. The post was online for about 10 to 15 minutes before being taken down, causing a significant drop in oil prices, only to rise again.
Not long after, during a White House press briefing, press secretary Karoline Leavitt confirmed that the information was incorrect. The post was blamed by the Department of Energy on an “agency staffer.”
The risks
Having offered financial and logistical assistance, Trump has repeatedly called out oil tankers for still avoiding traveling through the strait, urging the ship owners to “show some guts.”
There are, however, still significant risks these tankers are facing.
Early Wednesday morning, three cargo ships were struck by projectiles off the coast of Iran. The United Kingdom Maritime Trade Operations Center reported that at least one cargo vessel was struck by an unknown projectile in the Strait of Hormuz, resulting in a fire on board and forcing crew members to evacuate.
Wednesday night saw reports of another attack targeting two oil tankers in Iraqi waters in the Persian Gulf. Iraqi officials said the ships were attacked by explosives-laden boats, killing one person, while the other 38 crewmembers were rescued. Iranian state media reported that Iran claimed responsibility for the attack, and the director general of Iraq’s ports said they have since stopped all operation of oil ports.
As of Wednesday, UKMTO had reported 17 incidents affecting vessels operating in and around the Arabian Gulf, Strait of Hormuz, and Gulf of Oman — 13 of which were reported attacks.
The Strait of Hormuz is known for being extremely narrow, putting ships at greater risk of attack from missiles, other vessels, or even nautical mines.
Seigle also pointed out that these cargo ships can be threatened by long-distance drones.
The U.S. military has gone after Iran’s navy very hard during the war, having damaged or destroyed 60 of their vessels, including all four Soleimani-class surface combatants. U.S. forces have also destroyed more than a dozen minelayers near the Strait. The more aggressively the American military targets the Iranian navy, the harder it will be for them to pose a threat there.
Trump warned that the U.S. attacks against Iran would intensify even further if they decide to mine the strait, posing potentially lethal risks for anyone sailing through it.
If the president tasks the military with escorting ships through the region, “we’ll look at the range of options to set the military conditions to be able to do that,” Gen. Dan Caine, the chairman of the Joint Chiefs of Staff, said on Tuesday, adding that they are currently “looking at a range of options.”
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Iran could target vessels transiting the strait from its own shores, not just from at sea, and that also poses challenges to ensuring the safety of those vessels. The U.S. has simultaneously also aggressively targeted Iran’s ballistic missile arsenal, launchers, and production facilities, and these efforts also address that potential threat as well.
CENTCOM warned on Wednesday that the Iranian regime has positioned military vessels and equipment in civilian ports serving maritime traffic, and as a result, Iranian civilians should avoid those areas.
Western countries need to “eliminate the Iranian threat to target tankers, and so this can either come through escorting tankers directly, using the U.S. navy and allied navies to escort tankers, and so they’ll provide missile defense and drone defense as they’re going or you continue to systematically target Iran’s ability to launch missiles and drones,” Spencer Faragasso, a senior fellow with the Institute for Science and International Security, told the Washington Examiner.
