The Strait of Hormuz has always been one of the most critical arteries in the global energy system. About a fifth of the world’s oil and liquefied natural gas flows through that narrow strip of water between Oman and Iran. But if you talk to industry veterans now, you’ll hear something that would have sounded implausible just two years ago: the old Hormuz is gone, and it’s probably not coming back.
The blockade Iran launched in response to the U.S. and Israel war in late February has created the largest oil supply disruption in history. We’re not talking about a temporary blip. We’re talking about a fundamental restructuring of how energy moves from the Persian Gulf to the rest of the world.
Middle East leaders seem to have already accepted this new reality. Amos Hochstein, who served as a senior energy and national security advisor to former President Joe Biden, put it bluntly to CNBC: “No matter what happens, the Iranians will control the Strait of Hormuz for the foreseeable future. It doesn’t even matter what the deal says. Everybody in the region believes that.”
That’s a stunning admission from someone who certainly isn’t known for Iran-friendly sentiment. If the people closest to the situation have already made peace with Iranian control, the rest of us should probably take note.
The Numbers Tell a Rough Story
Let’s look at what’s actually happening on the water. Before the war, Hormuz was handling roughly 75 ships per day. Now, the best-case projections put traffic at maybe 60 to 70 percent of those prewar levels. That sounds almost okay until you remember that we’re not just talking about fewer tankers. We’re talking about a fundamentally different type of traffic.
China-affiliated vessels will likely move through freely. Western ships? They’ll need to coordinate directly with Iran’s Revolutionary Guard. That puts them at real risk of violating U.S. sanctions. For shipping companies, that’s not just a logistical headache, it’s a potential legal nightmare that most would rather avoid.
Richard Meade, editor-in-chief of Lloyd’s List, described this as “a permanently bifurcated strait where access is a function of political alignment, not freedom of navigation.” That’s a diplomatic way of saying we’ve created a two-tier system where your nation’s foreign policy determines whether you can move cargo through one of the world’s most important waterways.
The Red Sea Lesson Nobody Wanted to Learn
The eerie parallel here is what’s happened in the Red Sea. Houthi militants, backed by Iran, started attacking commercial ships in November 2023. Within two months, daily traffic through the Bab el-Mandeb Strait collapsed from 75 ships to just 31. More than two years later, we’re still nowhere near those old numbers.
Tomer Raanan, a maritime risk analyst at Lloyd’s List, pointed out something important: you don’t need a massive navy to disrupt a chokepoint. The Houthis proved that. And unlike the Red Sea, where ships can simply reroute around the Cape of Good Hope, Hormuz has no real alternative. There’s no way around it. Either your oil goes through the strait, or it doesn’t go at all.
That’s exactly why the pain here is so much sharper.
The Pipeline Question
Saudi Arabia and the UAE have been diverting millions of barrels per day through pipelines to Red Sea and Gulf of Oman terminals, which has softened the blow somewhat. The UAE is now accelerating construction of a second pipeline, expected online in 2027.
U.S. Energy Secretary Chris Wright called the blockade “a card you can play once,” arguing that new routes will eventually reduce Hormuz’s importance. There’s some truth to that, but let’s be honest: pipelines can’t move everything. LNG, by its very nature, needs ships. Fertilizer and dozens of other commodities also require maritime transit. Building pipelines helps, but it doesn’t solve the fundamental problem.
So Where Does This Leave Us?
The current ceasefire looks stable for now. The Trump administration appears focused on getting commercial ships back through Hormuz. But here’s the uncomfortable question every shipowner has to ask themselves: if war resumes in six months or a year, do I want my vessel trapped on one side of the strait while missiles fly overhead?
That’s not an irrational fear. The underlying issues that sparked this conflict, particularly around Iran’s nuclear and ballistic missile programs, remain utterly unresolved. From Israel’s perspective, those programs are existential threats. Walking away without meaningful constraints probably isn’t in the cards.
What we’re left with is a strait that will handle less traffic, where passage depends on who you know and which flag your ship flies, and where the risk of sudden disruption is now baked into every shipping calculation. The global energy market will adapt, as it always does. But the seamless, open-access Hormuz that the industry took for granted for decades? That version of history is already over.
