The 2026 U.S.-Iran War and the Global Energy Crisis

Chapter 8: The Noose of 21 Miles

8.1 Geography and Scale

The narrowest point of the Strait of Hormuz is 34 kilometers. It is shorter than the straight-line distance from Seoul to Suwon. On clear days, the Musandam Peninsula of Oman is visible from the Iranian coast. Through this narrow passage flows 20 million barrels of crude oil and petroleum products daily. That is one-fifth of the world's daily oil consumption and more than one-quarter of all oil traded by sea.

The number 34 kilometers is an illusion.

Not all of the strait is navigable. The seafloor is shallow and reefs are scattered, so only a portion of the waters can accommodate very large crude carriers with deep drafts. The International Maritime Organization has established a Traffic Separation Scheme within the strait to prevent collisions. There are separate lanes for entering and exiting the Persian Gulf. Each lane is 2 miles wide, approximately 3.2 kilometers. Between the two lanes is a 2-mile buffer zone for collision avoidance. The actual width of sea lanes available for ships is roughly 6.4 kilometers in both directions combined.

Consider how tight a 3.2-kilometer-wide channel is for a tanker 330 meters long and 60 meters wide. Such a vessel requires several kilometers just to stop once its engines are cut. Two ships cannot pass side by side in this waterway. They must proceed single file. This delicate choreography continues 24 hours, 365 days a year.

Iran's coastline encloses the entire northern side of the strait. The tail end of the Zagros Mountains extends to the sea, making the mountainside ideal for concealing anti-ship missile batteries and coastal artillery. Within the strait are Qeshm Island, Hormuz Island, and Larak Island, which Iran uses as military bases. The islands of Abu Musa and the Greater and Lesser Tunbs, over which the UAE disputes sovereignty, also occupy positions here. These islands command the ability to monitor and strike all ships passing through the strait at close range. High-speed craft of Iran's Islamic Revolutionary Guard Corps deploy from these islands as operations demand.

As of 2024, an average of 20 million barrels of crude oil and petroleum products passed through the Strait of Hormuz daily. This figure comes from the U.S. Energy Information Administration. In the first half of 2025, this volume remained nearly unchanged. Eighty-four percent of this cargo was destined for Asia. China, India, Japan, and South Korea received 69 percent of the crude oil passing through Hormuz.

Nor is it oil alone. Qatar accounts for approximately 20 percent of the world's liquefied natural gas exports, and the only route for Qatar's LNG to reach the global market is through the Strait of Hormuz. As of 2025, Qatar's annual LNG exports exceeded 112 billion cubic meters. This gas supplies winter heating and power generation for South Korea and Japan, and serves as an energy source for Europe after it cut Russian gas supplies. If the strait closes, there is no overland transport route to replace this gas.

Alternative routes do exist, though limited. Saudi Arabia has an East-West Pipeline connecting the oil fields along the Persian Gulf coast to Yanbu port on the Red Sea coast. Saudi Aramco states this pipeline has a daily capacity of up to 7 million barrels. However, approximately 2 million barrels are already used in normal operations, leaving spare capacity between 3 million and 5 million barrels. The UAE has a pipeline directly connecting Abu Dhabi's oil fields to Fujairah port on the Gulf of Oman, but its spare capacity is also modest after accounting for normal usage. Iraq, Kuwait, Qatar, Bahrain, and Iran have no pipelines to bypass the Strait of Hormuz.

Even at maximum capacity, all alternative pipelines can replace only 3.5 million to 5.5 million barrels daily. If Hormuz closes, approximately 14 million barrels of crude oil daily lose their destination. And LNG cannot be rerouted by pipeline, so the damage accumulates entirely.

This is the physical reality of the Strait of Hormuz. A lifeline for the planet,20 million barrels daily,is squeezed through a waterway 34 kilometers wide, with actual shipping lanes only 3.2 kilometers wide. The total capacity of alternative routes falls short of even half this volume.

8.2 A History of Recurring Crises

In October 1973, Egypt and Syria launched a surprise attack on Israel, igniting the Yom Kippur War. Arab oil-producing nations halted petroleum exports in retaliation against the United States and the West for their support of Israel. This was the First Oil Crisis. The oil removed from markets represented only about 6 percent of global supply. Yet with just 6 percent gone, oil prices surged from three dollars to twelve dollars per barrel, a fourfold increase. Advanced economies sank into stagflation. The world experienced for the first time the reality that oil could be a weapon.

The character of the Strait of Hormuz changed fundamentally in 1979. An Islamic revolution erupted in Iran, toppling the Pahlavi dynasty and giving way to Khomeini's Islamic Republic. Iran, once an American ally, became an adversary that called America "the Great Satan." Iran's oil production plummeted, bringing the Second Oil Crisis. From this moment forward, Iran began viewing the Strait of Hormuz not as a commercial waterway but as a strategic instrument to pressure the West. The Islamic Revolutionary Guard Corps was established and asymmetric naval power was built up. A doctrine took shape: "If our interests are threatened, we will close the strait."

The Strait of Hormuz became an actual battlefield during the Iran-Iraq War (1980-1988). Beginning in 1984, Saddam Hussein of Iraq attacked Iranian tankers and the Kharg Island oil terminal with French-made Exocet missiles to cripple Iran's oil exports. Iran retaliated. It attacked Kuwaiti and Saudi tankers supporting Iraq using Islamic Revolutionary Guard Corps speedboats, naval mines, and helicopters. During this eight-year campaign known as the Tanker War, Iraq conducted 283 attacks and Iran conducted 168. Lloyd's estimated that 546 merchant vessels were damaged during this period and approximately 430 civilian mariners were killed.

The Persian Gulf became a sea swarming with missiles and mines. In 1987, Kuwait's government devised an ingenious solution. It asked the United States whether it could place the American flag on its own tankers. The Reagan administration, after deliberation, agreed. Operation Earnest Will, in which the U.S. Navy escorted tankers, began. It was the largest naval convoy operation since World War II.

Still, the U.S. Navy paid a steep price. In July 1987, during the first escort mission, the American-flagged tanker Bridgeton struck a mine laid by Iran. In April 1988, the escort frigate USS Samuel B. Roberts struck a mine, fracturing its keel and opening a 15-foot hole. About 60 crew members were wounded. The U.S. responded with Operation Praying Mantis, striking Iranian naval vessels and oil platforms. Two Iranian Navy frigates were sunk or severely damaged in the process. In July 1988, the U.S. Navy cruiser USS Vincennes mistook an Iranian civilian airliner for a fighter and shot it down. All 290 passengers and crew were killed.

The Tanker War was ghastly, yet one fact remained unchanged. The Strait of Hormuz never fully closed. The U.S. Navy's overwhelming firepower suppressed Iran's blockade attempts, and Iran itself calculated that if it closed the strait, its own oil exports would be cut off as well. Insurance costs surged and some ships were attacked, but the flow of oil itself continued.

Tensions reached a peak again during Iraq's invasion of Kuwait in 1990 and the ensuing Gulf War in 1991. Iraqi forces sowed mines in the Persian Gulf, but under pressure from the coalition's air and naval power, the strait remained open.

For decades afterward, whenever tensions with the West over nuclear development intensified, Iran threatened to close Hormuz. In 2012, Iran's Navy conducted large-scale military exercises in the strait, displaying its blockade capabilities. In 2019, several tankers near the Strait of Hormuz came under attack in successive incidents. Yet each time, Iran did not cross the line. The calculation that closing the strait would kill itself remained operational.

Global stock and oil markets grew accustomed to this pattern. "Hormuz crises ultimately resolve through rhetoric." This was the lesson learned over half a century.

8.3 Why This Time Is Different

On February 28, 2026, the United States and Israel launched Operation Epic Fury, eliminating Iran's Supreme Leader Ali Khamenei and striking military installations across Iran. A decades-long implicit red line collapsed. For an Iran that had lost its leadership, closing the Strait of Hormuz was no longer an act of suicide. In a situation where full-scale war had already begun, it became the choice of a side with nothing left to lose.

On March 2, a senior Islamic Revolutionary Guard Corps official made an official announcement. The strait was closed, and all ships attempting passage would be targets of attack. And Iran acted on these words.

The night of February 28, at least three tankers near the strait came under fire. One was engulfed in flames off the Omani coast. On March 1, the tanker Skylight was struck by a projectile north of Khasab, Oman, killing two Indian crew members and wounding three. On the same day, a crewless surface vessel attacked the MKD VYOM, causing fire and explosion in the engine room. One Indian crew member died. By around midnight on March 2, not a single tanker transmitting an Automatic Identification System signal remained within the strait.

Attacks continued afterward. On March 6, a tug sent to rescue an attacked ship was struck by two missiles and sank, with at least three crew members missing. On March 7, the Islamic Revolutionary Guard Corps announced it had attacked the tanker Prima with a drone and the American tanker Louis P with a drone within the strait. The tanker Sonangol Namibe, anchored in Kuwait's port, came under attack from an unmanned surface vessel, causing an oil spill. The port was more than 800 kilometers from the strait. The incident demonstrated that Iran's striking range extended far beyond the strait itself.

As of March 12, confirmed attacks by Iran against merchant vessels numbered 21. According to the Joint Maritime Information Center, 23 maritime attacks were reported in the Arabian Gulf, Strait of Hormuz, and Gulf of Oman regions. Mariner deaths totaled at least five.

There are three fundamental reasons why this time is different from the past.

First is the method of physical blockade. Iran did not employ a conventional blockade by lining warships across the strait. Instead, it used asymmetric tactics combining drones, anti-ship missiles, unmanned surface vessels, and high-speed craft attacks. Mines were added to the mix. CNN reported on March 10 that Iran had begun laying mines in the strait. The number of confirmed mines reached dozens, but Iran retained 80 to 90 percent of its small minelayers, making it capable of laying hundreds more. The mines were of the Maham-3 and Maham-7 varieties, modern weapons equipped with magnetic and acoustic detection sensors. U.S. Central Command announced on March 10 that it had destroyed multiple Iranian naval vessels, including 16 minelayers. Yet naval analyst Farzin Nadimi assessed that most of Iran's small fast-attack craft remained intact.

Dozens of mines are, from a military standpoint, a scale that mine-countermeasures vessels can clear. The problem was not military removal but psychological and economic effect. The mere possibility of mines ties up a hundred-million-dollar tanker. Ship owners, captains, crew, and insurers all refuse to accept that gamble.

Second is the insurance market's response. On March 1 and 2, seven of twelve international Protection & Indemnity insurance clubs sent cancellation notices for war risk insurance covering the Persian Gulf, Gulf of Oman, and Iranian territorial waters. These included Gard, Skuld, NorthStandard, the London P&I Club, and the American Club. The cancellations took effect from March 5.

War risk insurance operates on this structure. Ship owners pay annual premiums and receive coverage worldwide during peacetime. However, to enter high-risk zones designated by London's Joint War Committee, they must pay an additional premium each time. Before the war, this additional premium was 0.125 to 0.2 percent of hull value. When war started, this rate jumped to 1 percent in a single day. To transit the Strait of Hormuz required 1.5 to 3 percent, and 5 percent for ships connected to the U.S., UK, or Israel. For a 150-billion-won LNG carrier, this meant an additional insurance premium exceeding 1.5 billion won per transit. Estimates suggested total insurance costs for transiting Hormuz could reach 100 to 140 billion won per vessel.

Insurance existed. The Lloyd's Market Association stated on March 23 that war insurance for strait transit remained possible. It said 88 percent of Lloyd's insurers maintained underwriting capacity. Yet this meant insurance "existed," not that ships "were moving." In the same statement, the LMA said that the reason ships were not moving was not a lack of insurance, but because captains and owners judged the safety risk to crews and vessels too high.

Ship owner Harry Vafias's words sum up the situation. His family owns or manages about 100 tankers, bulk carriers, and LPG carriers. He told Lloyd's List: "Right now, there is no insurance for transiting the Strait of Hormuz, and nobody wants to do it. The probability of being hit is too high. You would be insane to do it without insurance."

The results showed in numbers. Before the war, approximately 138 cargo ships passed through the Strait of Hormuz daily. On March 7, only one commercial ship transited the strait and zero tankers. According to Lloyd's List tracking, 142 vessels in total transited the strait from March 1 to 25, a span of 25 days. In the same period in 2025, 2,652 vessels passed through. That was a 94.6 percent decline. Barely one day's pre-war traffic was squeezed into 25 days.

Third, this time Iran not only closed the strait but opened it again on its own terms.

Iran established a selective control system blocking most vessels while allowing some passage. Instead of the central bidirectional shipping lanes previously used, it opened a new route through Iranian territorial waters between Qeshm and Larak islands. This passage lay just 20 miles from the Iranian mainland, directly off Bandar Abbas, home to Iran's principal naval base.

The procedure works as follows. The ship's operator submits the vessel's International Maritime Organization number, cargo list, final destination, crew roster, and ownership information to an intermediary connected to the Islamic Revolutionary Guard Corps. The Guard Corps reviews this. It questions sanctions status, cargo content, and geopolitical character. If approved, an authorization code and route instructions are issued. When the ship approaches the strait, the Guard Corps confirms the code via very high frequency radio. If confirmed, an Iranian escort vessel appears to guide the ship through Iranian territorial waters around Larak Island. Without the authorization code, passage is denied. In mid-March, Islamic Revolutionary Guard Corps Navy Commander Alireza Tangsiri announced that the container ship Selen had been turned back for "failure to follow legal procedures and lack of authorization."

According to Lloyd's List tracking, 26 vessels transited the Islamic Revolutionary Guard Corps-controlled route from March 13 to 25. These included vessels flagged to China, India, Pakistan, Malaysia, Egypt, and South Korea. The Chinese-owned tanker Bright Gold transited this route on March 23. Two Indian gas carriers and one Saudi tanker bound for India were granted passage. A Pakistani tanker received Iranian authorization and transited on March 16. On March 26, Malaysia announced it had received authorization for its vessel's passage.

And there was a transit toll.

Iranian MP Alaeddin Boroujerdi said in an interview with the London-based Persian satellite broadcaster Iran International, "War has costs. Of course, we should collect tolls from ships passing through the Strait of Hormuz." The amount was 2 million dollars per vessel, about 3 billion Korean won. According to Lloyd's List, at least two ships settled this toll in Chinese yuan. The payment was brokered by a Chinese shipping services company and remitted to Iranian authorities in yuan. According to the Atlantic Council, March transaction volume on China's Cross-Border Interbank Payment System (CIPS) hit a record high for the year.

The Iranian parliament did not stop there. MP Mohammadreza Rezaei Kouchi declared through the Revolutionary Guards-affiliated news agencies Fars and Tasnim that parliament was pursuing legislation to formally codify Iran's sovereignty and control over the Strait of Hormuz and to create a legal framework for collecting tolls.

Military blockade is an act of war. When war ends, it disappears. But law is different. If the Iranian parliament codifies sovereignty over the strait and toll collection in domestic law, even when a ceasefire or peace agreement is reached, that law does not automatically vanish. One of Iran's five conditions for ending the war was "recognition of Iran's sovereignty over the Strait of Hormuz."

The UN Convention on the Law of the Sea (UNCLOS) guarantees transit passage rights through international straits. Article 44 stipulates that straits-adjacent states must not obstruct transit passage. However, Iran signed this convention in 1982 but did not ratify it. On this basis, Iran claims it is not bound by the convention's transit passage provisions.

Gulf Cooperation Council (GCC) Secretary-General Jasem Mohamed al-Budaiwi characterized Iran's toll collection as "an invasion and violation of the UN Convention on the Law of the Sea." Sal Mercogliano, a maritime historian at Campbell University, said, "There is nowhere in international law that says you should set up a toll gate and squeeze ships."

But legal disputes are one thing, and reality is another. Iran held physical control of the strait. No matter how powerful the U.S. Navy, the challenge of suppressing Iran's 1,000-mile coastline, mobile anti-ship missiles hidden in mountainous terrain, a fleet of small fast attack craft, mine-laying capability, and guaranteeing the safety of merchant vessels was an entirely different order of magnitude. Retired U.S. Army Colonel Richard Allen Williams said in an interview with Radio Free Europe/Radio Liberty (RFE/RL), "I cannot think of an easy way to militarily reopen and maintain Hormuz."

Lloyd's List assessment was equally sobering. Even in the most optimistic escorted convoy scenario, strait traffic would remain at about 10 percent of normal, and it would take months to clear over 600 stuck vessels.

International Energy Agency (IEA) Executive Director Fatih Birol described the situation as "the largest supply disruption in the history of the global oil market." Approximately 15 million barrels of crude oil and 5 million barrels of petroleum products were trapped inside the Persian Gulf per day. Iraq and Kuwait had to reduce production as storage tanks filled. Brent crude topped 100 dollars per barrel on March 8th, then climbed to 126 dollars. This was a rise of more than 40 percent from the pre-war level of 73 dollars.

In 1973, when only 6 percent of supply was cut off, oil prices quadrupled. During the Tanker War in the 1980s, the strait never fully closed. In March 2026, 20 percent of global oil supply was cut off, strait traffic dropped 95 percent, and the total capacity of alternative routes fell short of even one-third of the lost volume.

If previous crises had been convulsions within the system, the March 2026 Strait of Hormuz was a hand tightening the system's own windpipe. And that hand was demanding a toll. Not in dollars, but in yuan.

AI expert and lawyer Kim Kyung-jin

AI legal policy specialist · former member of the National Assembly · author of numerous works

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