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Iran Blockade Closes Strait of Hormuz, Oil Prices Soar

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Key Points
  • Iran has effectively closed the Strait of Hormuz, a vital oil chokepoint, causing maritime traffic to nearly halt and oil prices to surge above $100 per barrel.
  • The U.S. has launched a major military operation to reopen the waterway, destroying Iranian mine-laying ships and deploying forces, while Trump calls for an international coalition.
  • International support for a coalition faces challenges, with France, Japan, and Australia refusing to send ships, and Iran warning of consequences for those who help.

The Strait of Hormuz, through which about one-fifth of the world's oil passes, has seen maritime traffic almost come to a standstill. This effective closure has driven oil prices to record levels, surging above $100 per barrel. According to www.cbsnews.com, Arne Lohmann Rasmussen described the strait as de facto closed because no one dares to go through due to attack risks and high insurance costs.

Iran has effectively shut down the Strait of Hormuz in retaliation for joint U.S.-Israeli attacks, according to multiple reports. The Iranian military has fired upon several ships in the strait. According to Western intelligence assessments, Iran has laid sea mines in the waterway, and there are reports of underwater mines, according to officials. Iran has not formally announced the strait's closure but has warned ships not to cross and claimed responsibility for attacks, research indicates.

The U.S. military response has escalated sharply. The Strait of Hormuz has been in focus after the U.S. destroyed 16 Iranian mine-laying ships overnight. U.S. forces have sent A-10 Warthogs and Apache attack helicopters to shoot at Iranian ships and drones in the strait, multiple reports indicate. The U.S. is trying with military means to break the blockade in the Strait of Hormuz, officials said. The U.S. has targeted Iran's navy, destroying warships and attempting to hamper its ability to block the strait, research shows.

A little less than a handful of ships have been affected.

Erik Hånell, CEO of Stena Bulk

U.S. President Donald Trump has vowed to reopen the Strait of Hormuz and is calling for a coalition of nations to send ships to help. Trump says the country has begun the process to 'clear the Strait of Hormuz' of sea mines. He spoke with French President Emmanuel Macron about forming a coalition to secure the strait. Trump also suggested implementing a program selling insurance for ships traveling through the Gulf to ensure free energy flow.

International support for a coalition faces challenges. France, Japan, and Australia are refusing to deploy ships to help reopen the Strait of Hormuz, according to multiple reports. Britain is considering sending minehunting drones to secure the Strait of Hormuz, multiple reports indicate. Iran has warned the UK will face consequences if it helps the U.S. reopen the Strait of Hormuz, according to Iranian Foreign Ministry spokesman Esmail Baghaei.

The current crisis has deep roots in the war that began on February 28 with U.S.-Israeli military operations, including air strikes against Iran, research shows. Iranian Supreme Leader Ayatollah Ali Khamenei was killed in a strike on that date. The strait is located on Iran's southern border, connecting the Persian Gulf to the Gulf of Oman and Arabian Sea, and is about 100 miles long. Research indicates its width at the narrowest point is 21 miles, though some sources claim 24 miles, a discrepancy that could affect strategic assessments of naval operations. Tensions spiked when Iran temporarily closed the Strait of Hormuz for live fire drills during nuclear talks, research shows.

The strait is de facto closed because no one dares to go through due to attack risks and high insurance costs.

Arne Lohmann Rasmussen

Leadership uncertainty complicates Iran's position. Iran's new supreme leader is Mojtaba Khamenei, who succeeded his father Ayatollah Ali Khamenei. Reports have emerged that Mojtaba Khamenei may have been injured in the strike that killed his father and has not been seen in public. Iran's new supreme leader, Mojtaba Khamenei, announced on March 12 that he would continue to keep the strait blocked off, research indicates. Trump questioned whether Iran's new supreme leader, Ayatollah Mojtaba Khamenei, is alive, citing uncertainty and reports of injuries. U.S. defense chief Pete Hegseth said Mojtaba Khamenei was believed to have been wounded in the strikes. This disagreement over the new supreme leader's condition and visibility raises questions about Iran's leadership stability.

Operational dangers for shipping are severe. The ongoing war has made the Strait of Hormuz extremely dangerous, according to experienced sea captain Ylikainuu. Passing through would entail enormous economic risk for shipping companies due to high insurance premiums, according to Arto Juntunen. If a missile or drone hits a tanker, it is practically almost impossible to save a burning ship, officials said. The situation is seen as significantly more difficult than in pirate-threatened waters, and a similar convoy system would not work now due to more advanced weaponry, according to Arto Juntunen. Iran is operating the Strait of Hormuz as a 'de facto toll booth', with some ships paying in Chinese yuan to pass, according to Lloyd’s List Intelligence.

U.S. intelligence assessments warn of continued risks. Iranian Ghadir-class mini submarines are operating in the Strait of Hormuz, known as 'Ghosts in the Gulf', and have previously caught US Navy vessels off guard, according to Tehran's previous claims. American officials have warned the Strait of Hormuz could become a deadly 'kill box' for the US Navy if warships are sent. John Bolton claimed Iran could have obtained a nuclear weapon from North Korea just before Trump launched attacks, according to the former security adviser.

The crisis is unlikely to be resolved soon due to escalating conflict, disruption of Hormuz, and producer shut-ins.

Energy analysts with Eurasia Group, Energy analysts

Diplomatic efforts continue alongside military action. Delegations from the U.S. and Iran are in Pakistan for planned peace talks, officials said. The clearing of the Strait of Hormuz is not coordinated with Iran, according to media reports. Trump asserted that Iran has expressed interest in negotiations but its leadership remains disorganized. Trump does not think the war will end this week but believes it will be soon. He asked Beijing to delay a summit with Chinese President Xi Jinping due to the war.

The traffic impact has been dramatic. Ship trafficking data showed a 70% drop in vessels traversing the strait after the launch of Operation Epic Fury, research indicates. The longer traffic stands still, the greater the impact becomes, officials said. According to Sveriges Radio Nyheter, Erik Hånell described only a little less than a handful of ships having been affected. According to www.cbsnews.com, Energy analysts with Eurasia Group described the crisis as unlikely to be resolved soon due to escalating conflict, disruption of Hormuz, and producer shut-ins.

U.S. naval movements continue. Several American ships have passed through the Strait of Hormuz, according to reports from Axios. Donald Trump has deployed thousands of Marines to the Strait of Hormuz, including an amphibious ready group with the USS Tripoli, multiple reports indicate. The USS Tripoli is an amphibious assault ship carrying 2,000 Marines, though some reports claim 2,500 Marines are being sent, a difference that could impact perceptions of U.S. military commitment.

The scale of U.S. military success remains disputed. Pentagon chief Pete Hegseth said the US has destroyed over 120 Iranian naval ships. Trump claimed the US destroyed 58 Iranian naval ships overall. This discrepancy affects the assessment of the scale of U.S. military success and the extent of damage to Iran's naval capabilities. US forces destroyed targets on Iran's Kharg Island, a key oil terminal, according to Trump. Trump said strikes have hit over 7,000 targets across Iran, destroyed more than 100 naval vessels, and reduced its missile and drone capabilities.

Key unknowns persist. The exact current number of ships passing through the Strait of Hormuz daily, and how it compares to pre-war levels, remains unclear. Specific terms being discussed in the U.S.-Iran peace talks in Pakistan have not been disclosed. How many countries have definitively committed to sending ships to help reopen the strait, and what their contributions are, is uncertain. The full extent of damage to Iran's naval and military capabilities from U.S. strikes is not fully known. The current status and health of Iran's new supreme leader, Mojtaba Khamenei, and whether he is actively leading the country, remains unclear despite his announced statement on March 12.

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Iran Blockade Closes Strait of Hormuz, Oil Prices Soar | Reed News