Strait of Hormuz Oil Flows May Never Recover to Pre-War Levels
CNBC reported Friday that oil tanker traffic through the Strait of Hormuz may permanently fall short of pre-war volumes, regardless of whether Washington and Tehran reach a settlement to end the conflict.
Iran’s Grip on a Critical Chokepoint
The U.S. and Israel launched military operations against Iran on February 28, prompting Tehran to effectively close the Strait of Hormuz in retaliation. Analysts now describe this as the largest oil supply disruption in recorded history. Iran appears determined to leverage that stranglehold to secure lasting operational control over the strait in any eventual peace agreement.
Former Biden administration senior advisor Amos Hochstein told CNBC’s Squawk Box that Iranian dominance over the waterway is already a fait accompli. He said regional leaders universally believe Tehran will control Hormuz for the foreseeable future, regardless of what any deal formally stipulates.
Helima Croft, head of global commodity strategy at RBC Capital Markets, warned clients that any settlement preserving Iranian operational influence over the strait will produce meaningfully lower shipping flows than the world saw before February.
What a Bifurcated Strait Looks Like
Richard Meade, editor-in-chief of Lloyd’s List, outlined a scenario where throughput recovers to only 60 to 70 percent of pre-war volumes. Under that model, China-affiliated vessels would move relatively freely while Western ships would need bilateral arrangements with Tehran to pass. That exposure would put Western operators at serious risk of violating existing U.S. sanctions.
Meade described the outcome as something more corrosive than an acute crisis. He characterised it as a permanently divided strait where passage depends on political alignment rather than internationally recognised freedom of navigation.
The Red Sea Offers a Cautionary Precedent
The disruption to Red Sea shipping provides a sobering reference point. Houthi militants began attacking commercial vessels in November 2023, and daily transits through the Bab el-Mandeb Strait fell by more than half within weeks. Even after the attacks ceased at the end of last year, traffic has still not recovered to 2023 levels. Maritime risk analysts note the Red Sea episode demonstrated that a determined actor does not need a major naval force to paralyse a key trade lane for years.
Long-Term Consequences Still Unclear
The broader economic implications remain difficult to model given Hormuz’s outsized role in global energy supply. Roughly 20 percent of the world’s traded oil historically transited the strait. A structural reduction in those flows would reshape oil pricing, tanker routing, and energy security planning for importers across Europe and Asia alike.
