Middle East War: Analyst says Strait of Hormuz situation 'highly uncertain'

Strait of Hormuz closure: Stranded vessels, economic pressure, and the limits of US action

The effective closure of the Strait of Hormuz is sending shockwaves through the global economy, with hundreds of ships and thousands of mariners stranded as Iran controls the critical waterway, according to Africanews and Al Jazeera reporting.

Iran effectively seized control of the strait after the United States and Israel attacked it on February 28, Africanews reported. Weeks of heavy bombing and a US naval blockade imposed last month have yet to loosen Iran's grip, the outlet said. Iran says it will only reopen the strait if the war ends and the blockade is lifted, while US President Donald Trump is seeking wider concessions, including on Iran's nuclear program, Africanews reported.

According to the US military, 1,550 vessels from 87 countries are currently stranded in the Persian Gulf, Africanews reported. Only two ships have been successfully guided through the strait as part of "Project Freedom," the US said. The United Nations World Food Programme warned that 45 million people, mostly in Asia and Africa, could experience hunger if the strait does not open soon, and that blocking fuel and fertilizer shipments could push food prices out of reach for those already in a precarious situation, Africanews reported.

The situation around the vital oil chokepoint remains uncertain, with Iran continuing to signal its intent to target ships that do not use its preferred transit route, according to Africanews. Torbjorn Soltvedt, principal Middle East analyst at risk intelligence company Verisk Maplecroft, told Africanews: "We've seen renewed attacks against onshore facilities. So from Iran's point of view, the intention is still very much clear. They do intend to strike against any ships that transit the Strait of Hormuz that aren't passing through the Iran-approved route, which we've seen develop over the last number of weeks now. So, for shipping companies it's a slightly uncertain situation."

On Monday, the United States launched a bid to unblock the Strait of Hormuz so commercial ships could pass through freely, Africanews reported. However, some experts believe this initiative won't have the desired outcome. Soltvedt added: "This [US] initiative alone isn't something that looks like it's going to open the Strait of Hormuz. That can really only be done through either an agreement between the United States or Iran or whether resumption of conflict where the US significantly diminishes Iran's ability to carry out drones and missiles and diminishes Iran's ability to use boats to harass shipping in the Strait of Hormuz."

Before the war broke out, around a fifth of the world's oil and liquefied natural gas passed through the Strait of Hormuz, according to Africanews.

Economic warfare and alternative routes

Al Jazeera reported that the disruption at Karachi port, Pakistan's largest, is part of a wider pressure strategy shaped under President Donald Trump that is designed not to halt trade completely, but to control it. Trump wrote on Truth Social: "Iran is collapsing financially. They want the Strait of Hormuz opened immediately- Starving for cash!"

According to Al Jazeera, for the first six weeks of the US-Israel war on Iran that began on February 28, Tehran imposed an access system to control which ships transited the strait while also earning toll payments. Since April 13, the Trump administration has imposed a naval blockade that has effectively stopped ships sailing through the strait that either left or were destined for Iranian ports.

Al Jazeera reported that the blockade has not only hurt Iranian exports but also controls Iran's ability to import goods it desperately needs, with analysts saying this economic chokehold could exert even more pressure on Iran than American military might. Javed Hassan, an adviser to the Islamabad-based Centre for Research and Security Studies, told Al Jazeera: "Iran's storage reservoirs would fill quickly, some estimates suggest within a few weeks, forcing production shut-ins. Export revenues, the state's fiscal lifeline, would contract sharply. And while Iran has improved domestic agricultural capacity, its food security still depends in part on imports and foreign exchange, another channel of pressure."

However, Hassan cautioned that Iran has built "resilient architecture" during decades of surviving US-led sanctions, Al Jazeera reported. Iran has up to 170 million barrels of oil on tankers already out at sea, well beyond the Gulf of Oman, according to some estimates, the outlet reported. Iran is also already using overland and inland sea corridors that run through Central Asia and the Caucasus, Al Jazeera reported.

Karachi container backlog and toll payments

At Karachi port, 3,000 stranded containers hold cargo meant to be shipped to Iran, Al Jazeera reported. The vessels that were supposed to collect them have not arrived, and with tensions in the Strait of Hormuz escalating, there is no clarity on when those ships might finally reach Karachi, the outlet said.

Al Jazeera reported that Iranian and Pakistani business and industry leaders are discussing the possibility of a 900km land route to send stranded containers across the border between the neighbours. Iran would be willing to pay Pakistani truckers extra if they were willing to go all the way to the destination inside Iran, Al Jazeera reported.

According to Al Jazeera, since imposing restrictions on transit in early March, Iran has allowed passage to ships from Pakistan, Malaysia and Iraq without paying transit fees. Vessels from India have been allowed through the Strait of Hormuz under conditions such as detailed documentation and prior clearance, the outlet reported. By late March, at least some ships paid transit fees in Chinese Yuan, according to Lloyd's List, Al Jazeera reported. Iran has charged up to $2 million for each vessel to transit the Strait of Hormuz, according to some reports, and some transit payments have been made in cryptocurrencies, Al Jazeera reported.

Hamidreza Haji-Babaei, second deputy speaker of Iran's parliament, said on Thursday that the first revenue from tolls collected on vessels passing through the Strait of Hormuz had been deposited into the Central Bank of Iran, Al Jazeera reported.

Insurance costs and the economics of shipping

Al Jazeera reported that war-risk insurance for vessels has increased from around 0.12 percent of a vessel's value before the conflict to roughly 5 percent. For a very large crude carrier (VLCC) valued at $100 million, the war-risk insurance premium would be about $5 million for a single transit, Al Jazeera reported. VLCCs can carry up to two million barrels of crude, worth around $200 million, the outlet reported.

Marginal costs for VLCCs can absorb higher premiums and transit costs, but container shipping cannot due to tighter margins, fragmented ownership, and fixed timelines, Al Jazeera reported.

Perspectives

Iranian perspective: Iran's decision-making is driven by an existential threat perception rather than economic rationality, according to Javed Hassan, adviser to the Centre for Research and Security Studies. "When a leadership perceives an existential threat, economic rationality as we define it in peacetime loses primacy. Endurance becomes the objective function. Iranian decision-making reflects this logic. They could plausibly keep the strait disrupted for longer than many assume, precisely because the calculus is not marginal but existential," Hassan told Al Jazeera.

US perspective: The Trump administration views the situation as a pressure campaign designed to control trade rather than halt it completely, according to Al Jazeera. Trump's public statements frame Iran as financially collapsing and desperate for cash, the outlet reported.