“The geopolitical genie is out of the bottle: by capitalizing on geography to disrupt global trade, countries can strengthen their strategic position at relatively low cost.”
Alex Mills, The Atlantic Council, March 12, 2026
With each day of glorified actions against Iran, with each cloudy press session claiming supreme success through sheer force, the Trump administration is struggling to keep up appearances. Through an approach of existential attrition, the clerical regime in Tehran is now causing shocks and tingles in the global market, striking where influence is strongest: the petrol pump, the cash register, the hip pocket. Its missiles, drones or projectiles may not be able to reach the United States or Australia, but a note of panic is setting in.
Even before shipping was attacked (threats sufficed), the Strait of Hormuz was already being emptied of traffic. Fearing losses, major shipping firms such as Maersk, Hapag-Lloyd and CMA CGM ceased transiting cargo through the waterways. Since the war commenced on February 28, transits through the Strait have virtually stopped. This putative closure imperils the transfer of a fifth of the world’s oil supply, a fifth of the global trade in liquified natural gas, and some 13% of the global share in chemicals, including essential fertilisers. Freight rates for oil tankers, war risk insurance premiums and costs of marine fuel are all rising steeply.
A social media post from Iran’s Foreign Minister Abbas Araghchi brimming with satisfaction captured the mood: “9 days into Operation Epic Mistake, oil prices have doubled while all commodities are skyrocketing. We know the US is plotting against our oil and nuclear sites in hopes of containing huge inflationary shock. Iran is fully prepared.” He also promised that Iran had “many surprises in store.”
On March 11, a spokesperson for the Islamic Revolutionary Guard Corps (IRGC)’s Khatam al-Anbiya Headquarters resolutely declared that any vessel linked to Israel, the United States or their allies would be “considered a legitimate target”. He also rejected the effectualness of efforts to suppress price rises. “You will not be able to artificially lower the price of oil. Expect oil at $200 per barrel,” he warned. “The price of oil depends on regional security, and you are the main source of insecurity in the region.”
An effort to halt the rise of the oil price was made with a decision by 32 member states of the International Energy Agency (IEA) to release 400 million barrels of oil. “This is a major action aiming to alleviate the immediate impacts of the disruption in markets,” IEA Executive Director Fatih Birol explained in his address. “But to be clear, the most important thing for the return to stable flows of oil and gas is the resumption of transit through the Strait of Hormuz.”
Over March 11 and 12, in what seemed to be an effort to counter this move, the IRGC made good its word, attacking some six vessels, using projectiles and explosive-laden unmanned surface vessels. Targets included the Marshall Islands-flagged Safesea Vishu and the Malta-flagged Zefyros, both carrying fuel cargoes from Iraq. The Thai-flagged Mayuree Naree dry bulk vessel was hit by what was described as “two projectiles of unknown origin”. Mines have also been deployed to further complicate the prospect of transit.
The response from President Donald Trump and his officials to the price rises has been one of unrelenting fantasy. “The recent increase of oil and gas prices is temporary,” stated White House Press Secretary Karoline Leavitt, “and this operation [attacking Iran] will result in lower gas prices in the long term”. Energy Secretary Chris Wright was also unjustifiably confident that the price shocks would endure for a matter of “weeks, not months”.
After attending a classified and seemingly confused briefing on the war on March 10, Democratic Senator Chris Murphy from Connecticut was left unimpressed. “I can’t go into more detail about how Iran gums up the Strait,” he revealed, “but suffice to say, right now, they don’t know how to get it safely back open.” This was “unforgivable, because this part of the disaster was 100% foreseeable.” The primary war goal of the administration, as Murphy understood, was “destroying lots of missiles and boats and drone factories.” Such visionaries.
The Trump credo of estranged reality ignores the growing and enduring consequences of the strait’s closure and the war. A backlog of tankers on both sides of the waterway is growing. Ports are becoming congested with overstaying vessels. Production of oil and gas, impaired by Iranian attacks and continued closure, will have to resume in such states as Qatar, Bahrain, Iraq and Saudi Arabia. Anas Alhajji, a global energy markets boffin, offers a grim analysis: “Ending the war does not mean ending the crisis. We have countries that literally shut down production because their storage is full. To bring back that oil to a pre-crisis level takes time. For [liquified natural gas] in particular, it takes a very long time.”
Asked on whether vessels should still brave the journey through the Strait of Hormuz, Trump spoke with unfounded optimism. “I think they should. I think you’re going to see great safety”. The new round of strikes on shipping by Iran, initiated at a fraction of the cost of the US-Israel campaign against it, coupled with the inexorable rise of prices, suggests otherwise. In this regard at least, economics may well prove to be destiny.
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