The question of whether Iran can “close” the Strait of Hormuz once seemed theoretical. It no longer is. The Middle East is in its widest war for half a century, and the narrow waterway that threads between Iran and Oman has again become the world’s most volatile bottleneck.
On Sunday Iran unleashed waves of drones and missiles at Israel and US allies around the Gulf to avenge the killing of supreme leader Ayatollah Ali Khamenei. Washington and Jerusalem answered with heavy bombing raids inside Iran, destroying naval facilities and killing senior Revolutionary Guard commander Mohammad Pakpour. By nightfall dozens of people were left dead across the region, three US soldiers among them.
Shipping slowed to a crawl. Insurers warned they would cancel coverage. Tankers idled east of Muscat, unwilling to risk uninsured passage. The world’s most critical trade lane has not been sealed, but it has been priced as if it might be. Futures surged in after‑hours trading ahead of markets reopening. Once again, the distinction between threat and effect has blurred.
The point is not that Iran can dominate the Gulf militarily. It cannot. The point is that it can render the system unpredictable long enough to make markets flinch and policymakers scramble. In the 21st century, uncertainty is weaponised capital.
Lessons from history
We have seen the pattern before. In 1973, after the Yom Kippur War, Arab oil producers imposed an embargo on the West. Prices quadrupled and inflation rearranged global politics. Supply mattered less than psychology. Traders filled spreadsheets with fear, not barrels.
Today’s Hormuz crisis follows the same script at higher speed. News alerts move oil faster than tankers do. One credible threat — a naval mine, a signal jam, a missile strike near a pipeline — shifts billions in value before a single shipment is delayed. Markets trade on perception long before reality intervenes.
From deterrence to open war
Iran’s long-standing strategy of deliberate ambiguity has finally vanished. Sunday’s co-ordinated attacks on Israel, alongside strikes on the Gulf ports of Dubai and Oman, marked the definitive crossing of a strategic threshold. In response, a huge retaliatory bombing campaign has been launched against Tehran’s key infrastructure. This military action is blessed publicly by Washington and receives tacit backing from European allies. Collectively, these events have ended the era of shadow warfare and turned the “grey zone” crimson.
Opec+, seeking to calm nerves, announced an emergency production rise. Yet additional barrels matter little when tankers will not sail. The Gulf’s chokepoint, once assumed to be resilient, now demonstrates the fragility of a supply chain optimised for speed, not security.
Iran’s naval operations
Tehran’s long‑standing doctrine blends conventional drills with disruptive tactics. The Maritime Security Belt 2025 exercise last year presaged what followed: co-ordinated use of drones, coastal missiles and cyber‑jamming against maritime sensors. Those capabilities are now in combat use across the Gulf. GPS spoofing, communication blackouts and live missile fire have replaced deterrent signalling.
But even amid full‑scale hostilities, analysts note the strategic constant: Iran’s influence rises through disruption, not victory. Systemic tremor travels faster than any missile. The Islamic Revolution Guards Corps Navy’s fast‑boat swarms and shore‑based launchers were never designed for sea control. They were built to magnify uncertainty — to frighten insurers, reroute cargo and price in a premium for political interference. A single incident now triggers algorithmic trades in oil futures, spiking prices that feed instantly into inflation models.
Fragile global dependencies
Hormuz carries roughly a fifth of the world’s seaborne crude and a major share of Qatar’s liquefied natural gas (LNG). There is no cheap detour. Pipelines through Saudi Arabia and the United Arab Emirates offer relief, but capacity is limited. The global energy system, built for efficiency, has sacrificed redundancy.
Even before the weekend’s escalation, freight rates were climbing. Now they have exploded. Insurers demand war clauses; charterers insert force‑majeure lines. Uncertainty itself trades as a commodity — a futures position on fear.
However, Iran cannot endure a drawn‑out blockade nor absorb unrestricted bombardment. Its own economy depends on exports through the very same waters it seeks to unsettle. Its leverage lies beneath the threshold of a hot conflict — in the stretch where harassment and retaliation coexist. One drone strike, one damaged hull, may suffice to move global prices more effectively than a month of diplomacy.
Emerging markets in line of fire
The consequences of this war radiate outward. South Africa, already bruised by US tariff turmoil, will import higher fuel costs straight into transport and food prices. India’s near‑total dependence on Gulf crude turns Hormuz volatility into a balancing act between currency defence and budget pressure.
For Japan and China, strategic reserves buy time but not certainty; when freight rates leap, so do manufacturing costs. Across emerging markets, such shocks trigger capital flight into dollars, tightening liquidity precisely when growth falters. In that sense Hormuz is less a Gulf crisis than a mirror reflecting the vulnerabilities of every developing economy.
The crucial question is no longer whether the strait can be closed, but how much unpredictability the system can absorb before collective overreaction becomes the bigger threat. In that space between perception and panic lies the real battlefield of this war.
• Kajee is a lecturer at Southern Utah University, a nonresident research fellow at the Korea Institute for Maritime Strategy, and a researcher for the SeaLight maritime transparency initiative at Stanford University’s Gordian Knot Center for National Security Innovation.
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