20 Ships, $2 Million a Crossing, and Billions at Stake — Inside Iran’s New Hormuz Gambit

The Iranian coastline and the Omani shores are separated by a narrow strip of water that is only 21 miles wide at its narrowest point. Approximately one-fifth of the world’s oil supply was transported to refineries in Asia, Europe, and beyond by tankers loaded with crude oil from Saudi Arabia, Kuwait, Iraq, and the United Arab Emirates, which would line up and pass through it in an almost mechanical rhythm on most days, or at least what used to be most days. Strategists referred to it as the world’s most important energy chokepoint for many years. It turned into something more akin to a closed gate by the end of February 2026, and practically everything that follows is still developing in ways that are challenging to fully comprehend.
Supreme Leader Ali Khamenei was killed in the initial round of attacks that marked the start of the U.S. and Israeli military campaign against Iran on February 28. Iran did not launch a traditional counteroffensive in response. The Strait of Hormuz became a checkpoint as a result. According to reports, ships wishing to pass through Iranian territorial waters must now obtain clearance codes, submit cargo manifests and crew lists to IRGC-approved intermediaries, and accept armed escorts. According to reports, at least two ships have paid about $2 million for each crossing in Chinese yuan. The Iranian parliament is already working to make this agreement a permanent source of income. Deliberately and methodically, what was once a free shipping lane has been transformed into something akin to a toll road, except the toll-taker has ballistic missiles.
It is astounding how many people are behind the blockade. Even after taking into consideration emergency stockpile releases and pipeline diversions through Saudi Arabia and the United Arab Emirates, Bloomberg’s calculations indicate that the closure is reducing global oil flows by about 11 million barrels per day. The combined oil consumption of the UK, France, Germany, Spain, and Italy is surpassed by this net shortfall, which is approximately 9 million barrels per day. After a month, traders and executives who spoke with Bloomberg described an industry that hasn’t yet fully conveyed the gravity of the situation to the general public. Speaking at the CERAWeek conference in Houston, Patrick Pouyanne, CEO of TotalEnergies, stated unequivocally that the crisis becomes systemic if it lasts longer than three or four months. When someone whose business transports energy around the world on a daily basis issues that warning, it’s difficult to ignore it.

For now, at least, the pain is spreading unevenly. Asia has experienced the earliest and most severe shocks due to its heavy reliance on LNG and Gulf oil. Fuel has been rationed in Pakistan. Shortages are being reported in Thailand. Several Asian airlines have canceled flights from Vietnam to New Zealand, and hundreds of Australian gas stations have occasionally run out of fuel. For five months, South Korea imposed export restrictions on naphtha. Pakistan advised cricket fans to watch from home in order to conserve fuel, which encapsulates some of the texture of what happens when an energy crisis begins to affect everyday life in unglamorous, pragmatic ways. Because they don’t know how much supply they’ll have tomorrow, let alone next month, vendors in Singapore’s marine fuel market are allegedly hesitant to commit to forward contracts.
Analysts predict that Europe won’t be waiting much longer, but it is still observing and waiting. If Hormuz stays closed, a number of traders told Bloomberg that diesel shortages could start to affect the continent in a matter of weeks. It’s a significant statement. Diesel is essential to the movement of tangible goods throughout the continent because it powers trucks, trains, farm equipment, and construction machinery. The anticipation of a fresh supply of LNG from Qatar, which was meant to support markets this year, has been dashed as Europe emerged from winter already with depleted gas reserves. In energy circles, there’s a growing perception that what began as an Asian crisis will soon affect everyone.
In terms of diplomacy, the situation is complicated by conflicting interests and unconfirmed advancements. With a 900-kilometer border with Iran and cooperative ties to both Tehran and Washington, Pakistan has become perhaps the most active neutral mediator. The head of Pakistan’s army has communicated with U.S. Vice President JD Vance, and Foreign Minister Ishaq Dar declared that Iran had consented to allow 20 ships flying the Pakistani flag to pass through the strait beginning on Monday, publicly portraying this as a sign of potential peace. He might be correct that it has significance. Another possibility is that Iran is just showing that it has complete control over the quantity and timing of oil movements, which is a type of leverage in and of itself. Since the start of the war, only about 150 ships have passed through, compared to the usual daily average of 150. By all reasonable standards, twenty more ships is a drop in an ocean-sized problem.
At a Miami investor forum, Trump called the waterway the “Strait of Trump” before realizing his mistake, which caused both amusement and some unease. He has maintained that Iran’s choice to permit restricted ship passage is an indication of diplomatic advancement and respect. Iran’s selective control over who passes through is not a concession, according to outside analysts. It is a claim to sovereignty. Iran has made demands that have not been met, including reparations for the U.S.-Israeli attacks, formal international recognition of its authority over the strait, and the lifting of sanctions. Rangers, SEALs, and the 82nd Airborne are among the more than 50,000 American soldiers currently stationed in the area. Military strategists are reportedly weighing options ranging from raids on Kharg Island to forcibly securing the strait.
One thing keeps coming to mind as I watch this happen: the global economy was built on the presumption that Hormuz would always be open. Every supply chain that comes into contact with petroleum—that is, almost every supply chain on the planet, from jet fuel to food packaging to polyester clothing—was calibrated with that premise in mind. Over the course of ten years, the 1973 Arab oil embargo changed the structure of the world energy system. According to Jeff Currie of Carlyle Group, if the strait remains closed, demand could be destroyed at a rate of five to ten million barrels per day. This would be a painful and quick forced energy transition. Whether this ends in a matter of weeks or takes until 2027 is still up in the air. However, the world’s most vital artery begins to appear permanently altered the longer the gate remains closed.