Strait of Hormuz: The Chokepoint That Could Choke the World

The IRGC does not seize ships because it can. It seizes ships because, at this particular moment, it has very little else left to leverage. The attacks on the Euphoria, the MSC Francesca, and the Epaminondas in the Strait of Hormuz this week are not the actions of a power in control of events, they are the desperation manoeuvres of a regime that has watched its supreme leader assassinated, its nuclear sites bombed, its ports blockaded and its economy strangled, all within the span of less than two months. The Strait is Iran's last card. And Tehran is playing it with everything it has.

The broader arc of this crisis demands context. On February 28, 2026, the United States and Israel launched large-scale strikes on Iran, assassinating Supreme Leader Khamenei and key negotiator Ali Larijani - eliminating at a stroke both the political and diplomatic nerve centres of the Iranian state.

Within days, the IRGC formally closed the Strait. The International Energy Agency characterised the resulting disruption as the largest in the history of the global oil market - echoing the 1970s energy crisis through acute supply shortages, currency volatility, inflation, and heightened risks of stagflation and recession.

How We Got Here

A temporary two-week ceasefire was announced on April 7. Iran briefly reopened the Strait, and the two sides met face-to-face in Islamabad on April 11, the highest-level US-Iran meeting since the 1979 Islamic Revolution. The talks lasted 21 hours. They ended with Vance telling reporters that Tehran had refused to accept Washington's terms, while Iran's Araghchi claimed the two sides were "inches away from an MoU" before the US moved the goalposts.

The main unresolved issues were Iran's nuclear programme and the status of the Strait of Hormuz. Other sticking points included sanctions relief and frozen assets - while the US insisted on phased relief linked to compliance, Iran demanded comprehensive lifting of sanctions as a precondition.

The ceasefire collapsed almost on schedule. Iran's foreign ministry condemned Washington for "violating the ceasefire from the beginning," citing the US naval blockade of the Strait since April 13 and the capture of an Iranian container ship as breaches of the truce. Trump responded by praising the blockade, claiming it was costing Iran "$500 million dollars a day" while the US "loses nothing", and threatened to "knock out every single Power Plant and every single Bridge in Iran."

The three ships hit this week, and the two seized, are the latest move in this cycle of strike and counter-strike.

Where Iran Stands

Iran's strategic position is, simultaneously, more desperate and more dangerous than it has been in decades. Preliminary US intelligence assessments suggest the February strikes only set Iran's nuclear programme back by a few months, not destroyed it. That matters enormously. A damaged but surviving nuclear capability is still leverage. Tehran knows it.

Iran's counter-proposal at Islamabad included an end to all US-Israeli strikes on Iran and pro-Iranian forces in Lebanon and Iraq, security guarantees against future Israeli attacks, and comprehensive sanctions relief- all as preconditions, not outcomes. These are not negotiating gambits. They are minimum survival conditions for a state whose leadership was decapitated two months ago. By attacking commercial shipping, Iran is not trying to win a war it knows it cannot win conventionally. It is making the cost of not negotiating higher than the cost of doing so. About 70% of Japan's Middle Eastern oil passes through Hormuz; Pakistan has already formally requested Saudi Arabia to reroute supplies via the Red Sea. Every seized tanker is a message to Washington's Asian allies that the status quo is unsustainable.

Where the US Stands

Washington's position is more confident in tone but increasingly complicated in practice. The seizure of the Touska by USS Spruance was a calibrated show of naval dominance. But oil prices climbed sharply Sunday - Brent crude up about 7% to $96.88 - as Iran once again blocked the passage of most ships through the Strait, and US gas prices hit a national average of $4.05 a gallon. The blockade hurts Iran, but it also hurts every Asian economy dependent on Gulf oil, which means it indirectly pressures US allies whose cooperation Washington needs across the Indo-Pacific.

The Islamabad talks produced nothing. Pakistan's diplomatic bandwidth is not unlimited. Pakistani Foreign Minister Ishaq Dar spoke with Iranian Foreign Minister Araghchi on the importance of continued dialogue, and Pakistan's army chief had earlier carried what officials described as a new message from Washington to Tehran. But Iran has said there is "no decision yet" on returning to the table. The architecture of diplomacy is still standing. The parties inside it have stopped talking.

What the World Stands to Lose

Iran's forensics chief recorded nearly 3,400 people killed inside the country since US-Israeli strikes began on February 28. More than 2,200 have been killed in Lebanon. Thirteen US service members have died. The economic toll runs parallel. The Dallas Federal Reserve's modelling finds that a closure removing close to 20% of global oil supplies could raise the WTI price to $98 per barrel and lower global real GDP growth by an annualised 2.9 percentage points in the second quarter of 2026 alone, and if the disruption persists for three quarters, oil could reach $132 per barrel while global growth contracts by 1.3 percentage points on a year-over-year basis.

The IEA's April 2026 Oil Market Report is unsparing: physical crude prices surged to record levels near $150 per barrel in spot markets, far above futures, with middle distillate prices in Singapore reaching all-time highs above $290 per barrel. Resuming flows through the Strait of Hormuz remains, in the IEA's assessment, the single most important variable in easing pressure on energy supplies, prices, and the global economy. The Philippines has already declared a national energy emergency. The Gulf Cooperation Council's economic model, dependent on the Strait for exports and for over 80% of the region's caloric intake, has suffered what analysts describe as a systemic collapse.

Where Is This Heading?

Three trajectories are now visible. The first is a negotiated partial arrangement - Pakistan is still mediating, and Tehran has not formally shut the door. The most likely shape of any near-term deal is a temporary re-opening of the Strait in exchange for a sanctions pause, with the nuclear question deferred. It would be fragile by design.

The second is continued hot diplomacy - seizures, naval skirmishes and retaliatory strikes running alongside background negotiations, with both sides sustaining the fiction of a ceasefire. This is essentially what the past two weeks have been. It is survivable in the short term but ruinously expensive for the world, and it places Gulf states - who depend on the US for security and on the Strait for survival - in an impossible position.

The third trajectory is the one both sides are still refusing to name publicly: further escalation. Trump's infrastructure threats were not empty rhetoric; they echoed the language used before the February strikes. If Iran's maritime attacks continue and diplomacy exhausts itself, the pressure on Washington to escalate will intensify. A wider military campaign in Iran is a scenario that no economic model can fully price - because it would not merely disrupt the global economy, it would fundamentally restructure it.

The attacks on three vessels in the Strait of Hormuz this week are the clearest signal yet that the ceasefire was never more than a pause in a conflict that neither party knows how to end. The United States has the firepower to destroy Iran's infrastructure. Iran has the geography to hold the world's energy supply hostage.

Both have demonstrated their willingness to use these levers. Neither has achieved deterrence. What is unfolding in Hormuz is not a regional dispute- it is a confrontation already reordering global energy economics, supply chains and the diplomatic alignments of Asia. The ships being seized are cargo vessels. But what they carry beneath the hull damage is a more consequential question: whether the international order still has the architecture to stop two powers from dragging the rest of the world down with their unfinished war.