The Strait of Hormuz, a narrow connector between the Persian Gulf and the Gulf of Oman, has become a central pressure point in the wider war with Iran as vessels struggle to pass safely and insurers and shippers respond to the risk. The waterway is critical to global energy flows, and the disruption has fed directly into commodity markets, with oil prices hovering around $100 a barrel.
AP reported that a typical day sees ships carrying about a fifth of the world’s oil moving out of the Gulf through the Strait of Hormuz, but the war has left the corridor “effectively closed,” according to the International Energy Agency. The IEA said the war with Iran has hemming in more than 90% of crude and refined products leaving the region.
The closure risk is driven by threats and attacks targeting energy infrastructure and maritime traffic, AP reported. The Islamic Republic has vowed to block oil exports and said it would not allow “even a single liter” to be shipped to its enemies. As shipping through the strait tightens, analysts warn that higher fuel costs can quickly ripple into consumer prices and corporate operating expenses.
Hakan Kaya, a senior portfolio manager at Neuberger Berman, said “The scale of what is at stake cannot be overstated.” Some energy analysts cited by AP said oil prices could jump to $150 per barrel if the strait remains closed for weeks and conditions worsen, which they said could add to gasoline costs for drivers worldwide and raise costs for businesses.
While the strait is described as effectively closed, AP said some traffic has still moved. Maritime data firm Lloyd’s List Intelligence reported that at least 89 ships crossed the Strait of Hormuz between March 1 and 15, including 16 oil tankers, down from roughly 100 to 135 vessel passages per day before the war. AP reported that more than one-fifth of the 89 vessels were believed to be Iran-affiliated, with Chinese- and Greece-affiliated ships among the rest.
AP also reported that the U.K. Maritime Trade Operations center, run by the British military, received 21 reports of incidents affecting vessels in and around the Persian Gulf, Strait of Hormuz and Gulf of Oman as of Tuesday, including 16 attacks and five other incidents it labeled suspicious activity. The center’s reporting covered tankers, tugs, cargo and other vessels.
The disruption has prompted efforts to keep shipping moving and to cover losses that insurers and maritime operators say have become harder to price. AP reported that the U.S. is rolling out ship reinsurance in the region through the U.S. International Development Finance Corp. and that the facility would insure losses up to approximately $20 billion on a rolling basis, focusing on insuring cargo and physical damage to a ship’s structure and operating machinery to start. AP reported that President Donald Trump said, in a social media posting Saturday, “One way or the other, we will soon get the Hormuz Strait OPEN, SAFE, and FREE!”
AP reported that Trump has said that, if necessary, the U.S. Navy would escort oil tankers through the strait, though that has yet to happen. AP also reported that Trump’s Energy Secretary Chris Wright posted a claim on social media last week that the Navy had escorted a tanker through the strait, but Wright later deleted the false claim; AP said the initial posting and retraction sent oil prices and stock markets swinging.
Shipping operations have also been disrupted by commercial service decisions. Tom Goldsby, logistics chairman in the Supply Chain Management Department at the University of Tennessee, told AP: “Those ships that got stuck in the Gulf are not going anywhere.” He added that other vessels scheduled to replace them were anchored or rerouted.
Beyond maritime insurance and logistics, AP said the White House announced steps aimed at boosting supplies and easing constraints on U.S. transportation. It issued a 60-day waiver of Jones Act requirements—an approach that AP said is often blamed for higher gas prices because it requires goods shipped between U.S. ports to move on U.S.-flagged vessels. AP also said the Treasury Department eased sanctions to allow U.S. companies to do business with Venezuela’s state-owned oil and gas company, PDVSA, with limitations.
AP said the International Energy Agency pledged to make 400 million barrels of oil available from its members’ emergency reserves, describing it as its largest such move and more than double the 182.7 million barrels it released in 2022 in response to Russia’s full-scale invasion of Ukraine. But AP reported that analysts said such actions may only replenish supplies in the short term, and that a longer fix depends on getting the Strait of Hormuz cleared so energy shipments can move again.