Is the Strait of Hormuz—recently described by the office of Iran’s supreme leader as “the pillar of Iran’s new security order” and as transformative as having a nuclear weapon—actually becoming a fast-declining asset, leaving Iran increasingly exposed to the new wave of US economic sanctions that are planned?
This is the key debate now raging inside Iran, with very different conclusions being drawn about what Tehran’s negotiating strategy should be. Those who warn that the strait’s value as a chokehold on the world economy will fade, leaving the country without foreign exchange reserves, argue that Iran’s negotiators should push for a deal soon.
One analysis by Hamid Paktinat, founder of the Forum of Economic Activists, suggests that alternative pipelines and export routes being built by Iran’s Gulf neighbours will cut the strait’s strategic value in half within three years.
Those who worry about wasting assets naturally point to the separate visits to Tehran this week by Oman’s foreign minister, Badr Albusaidi, and Pakistan’s army chief, Asim Munir. These two figures are crucial to renegotiating the terms for reopening the strait and reviving the memorandum of understanding that the US and Iran agreed on in June but later abandoned.
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Iran’s president, Masoud Pezeshkian, and the parliamentary speaker, Mohammad Bagher Ghalibaf, have both recently made unusually blunt comments about the need to end the war—and the economic cost of continuing it. Ghalibaf said that no matter how much military power Iran had, “if people are hungry” and there was no economic growth, the country could not survive. Security, he argued, could not be maintained without a working economy. He added that, as someone with a military background, “we know the value of peace better than those who talk about peace.”
Pezeshkian was even more direct: “The war must end at some point,” he said. His argument was that Iran should end the conflict now, while Tehran still believes it is negotiating from a position of strength, rather than waiting until its position weakens.
The governor of Iran’s central bank, Abdolnaser Hemmati, also recently appeared on TV to warn about the economic pressures. “We are facing four or five major challenges at the same time, including maximum sanctions, blockade, cutting off oil exports, and a budget imbalance, each of which puts pressure on the economy,” he said. “One of the neighbouring countries told me that if one-fifth of what happened in your country happened in ours, we would not be able to govern the country.”
What is driving these remarks is the pressure on ordinary people in Iran, and an acceptance that the strait cannot, on its own, become a permanent security doctrine.
Hamid Asefi, a Tehran-based journalist specialising in geo-economics, is one of many warning that if Hormuz is played as Iran’s final card every time a crisis arises, that card will gradually lose its value. “A threat that is constantly repeated turns from ‘deterrence’ into a political habit; and a political habit, if not backed by concrete achievements, sooner or later leads to an inflation of threats,” he said.
The main question is no longer whether Iran can close the strait, he wrote, but whether closing Hormuz to the world opens the door to power for Iran—or locks part of its power behind that door.
“This is the Hormuz paradox. In international politics, a lever that is constantly flaunted can become its own enemy, because it forces others to plan ways to reduce their vulnerability […] the main question of Iranian policy in Hormuz must change from: ‘How can we make passage difficult?’ to ‘How can we make passage so safe and stable that everyone needs Iran to maintain this order?'”
That does not mean the lever is worthless. Far from it.
Graph showing daily transits through the Strait of Hormuz
According to data compiled by the ship tracker Kpler, only 112 oil and gas tankers went through the straitBetween 1 and 19 August, nearly 79% of ships used unconfirmed routes, 19% used Iran’s preferred northern route, and 2% used the Omani route. In reality, many of the ships on the unknown routes likely turned off their transponders and relied on US protection along the Oman route.
It also appears that, with US government support, oil companies from Saudi Arabia, the UAE, Qatar, and Kuwait have chartered a small group of tankers to move cargo through the southern route to the Gulf of Oman, where they offload the oil onto waiting tankers owned by their customers. This shifts much of the risk from shipping companies and oil buyers to the more motivated state oil producers and the US government. Iran has drawn up a blacklist of about 48 ships it will try to ban or fine.
However, the US government is probably overstating the impact of these workarounds. Chris Wright, the US secretary of energy, claimed on 18 August that the US navy had helped move over 15 million barrels of oil and other products. He also said the average daily flow of oil through the strait was now over 8 million barrels, but even that figure is less than half the prewar average and is widely seen as inflated. Most ship data trackers estimate the daily figure is closer to 6 million barrels.
Arsenio Dominguez, the secretary general of the International Maritime Organization, dismissed Donald Trump’s outlandish claim that the US navy had nearly opened the strait, telling Bloomberg: “Given the very small number of ships that transit the Strait of Hormuz, it is clear that this strait is, in practice, not open.” The US president has countered that all mines in the strait have been removed, leaving Iranian drone and naval attacks as the main threat.
But the fact that the strait handled 20% of oil and oil-related products before the war is driving a major restructuring of the global energy infrastructure. Gulf countries are rapidly building a network of alternative pipelines, aiming to protect more than half of their prewar exports from the impact of Hormuz by the end of this decade.
Paktinat has examined the capacity, length, and cost of pipelines being prepared in six countries over the next one to four years. He concluded that Saudi Arabia’s reliance on the Strait of Hormuz would drop from 70% to 15%. The UAE’s reliance would fall from 50% to 15%, and Iraq’s dependence would drop from 100% to 30%.
Kuwait and Qatar’s reliance would decrease from 100% to less than half. Bahrain’s reliance would fall from 100% to 15%, he assessed. Finally, Oman’s reliance would shift from 0% to becoming a major coastal oil transfer hub for the entire region.
Overall, he says, the strategic value of the Strait of Hormuz will be halved within three years and nearly lost within six years once these projects are implemented. The narrow horseshoe waterway will remain, but its strategic importance—the center of Iranian gravity—will have evaporated.
In the meantime, the US will try to turn Trump’s premature claim that the Iranian economy has completely collapsed into reality. It will attempt once again to block the vital arteries of the Iranian government across five key sectors: gold, cryptocurrency, technology, shipping, and aviation.
Success is by no means guaranteed, as Trump must know from his failure to defeat Iran in his first term. But slowly chipping away at Iran’s economic resilience until the strait finally becomes irrelevant may be Trump’s only remaining option.
Frequently Asked Questions
Here is a list of FAQs addressing the paradox Iran faces regarding the Strait of Hormuz written in a clear and natural tone
BeginnerLevel Questions
1 What is the Strait of Hormuz and why is it so famous
The Strait of Hormuz is a narrow strip of water between Iran and Oman Its famous because its a major highway for global oil and gas For decades about 20 of the worlds oil passed through it making it a critical chokepoint
2 What is the paradox that Iran is caught in
The paradox is that Iran has spent years threatening to close the Strait to pressure the West but the world is now less dependent on it If Iran actually closes it they hurt their own economy without causing the global crisis they used to Its a weapon that is losing its power
3 Why is the Strait of Hormuz becoming less important
Two main reasons New oil sources reduce reliance on Middle East oil and renewable energy is slowly replacing fossil fuels Also new pipelines allow oil to bypass the Strait entirely
4 Does Iran actually want to close the Strait
No Iran doesnt want to close it permanently They use the threat of closing it as leverage to get sanctions lifted or to gain power in negotiations Actually closing it would be an act of war and would devastate their own economy
5 How does Iran benefit from the Strait being open
Iran is a major oil and gas exporter The Strait is their own lifeline to the global market When its open they make money When its unstable they lose money
AdvancedLevel Questions
6 How has the decline in global oil demand changed Irans military strategy in the region
Iran has shifted from threatening to close the Strait to using harassment tactics They now seize commercial tankers launch drone attacks or sabotage ships This creates localized fear and spikes in insurance rates without triggering a fullscale military response or a global energy crisis
7 What role do new pipelines play in reducing the Straits strategic importance
Pipelines like the Saudi EastWest pipeline and the UAEs HabshanFujairah pipeline allow Gulf states
