Energy Musings - April 9, 2026
The fragile ceasefire between Iran and the U.S. has underscored the Strait of Hormuz's importance in Iran's strategy. The Strait's closing will be studied for lessons in using maritime power.
Strait Of Hormuz, Ceasefire, And Oil Prices
The announcement of a two-week ceasefire between Iran, the U.S., and Israel sent oil prices crashing below $100 a barrel to the low- and mid-$90s and stock markets soaring. Oil prices had climbed above $100 as the rhetoric surrounding peace negotiations indicated a shrinking chance of success. The news changed investors’ and traders’ views of the near-term trends in the stock and commodity markets.
It appears that Iran planned to include all its proxies fighting in the Middle East as part of the ceasefire agreement; Israel did not, at least as it applied to Lebanon. According to the U.S., Lebanon was not part of the ceasefire agreement. However, in retaliation for Israel’s attack on Hezbollah in Beirut, Iran was prompted to halt the passage of oil tankers through the Strait of Hormuz, which was a condition of the fragile agreement.
For days now, the debate has focused on how the world can/will allow Iran to close this important energy chokepoint to gain leverage in peace negotiations.
The cessation of shipping due to the U.S./Israeli attacks on Iran resulted in the largest energy disruption in history. While alternative exit routes for significant volumes of oil from Saudi Arabia and the United Arab Emirates began diverting oil supplies trapped by the inability of ships to exit the Persian Gulf, Iran has continued to wage war against the oil, gas, and petrochemical assets of its Gulf neighbors, who have supported the campaign against Iran.
In recent weeks, Iran has negotiated deals with countries desperate for energy supplies to pay fees to allow tankers delivering oil and gas to pass through the strait. Several Iranian-flag tankers carrying oil to China, the primary customer, have passed from the Persian Gulf. Still, there are hundreds of ships anchored in the Gulf awaiting the war’s ending, and/or insurance and military protection to transit the strait.
President Trump said that the complete opening of the Strait of Hormuz was a condition of the agreement. After the Beirut attack, Iranian media reported that the strait was closed to oil shipments. In the fog of war, it is difficult to know the truth. In the Middle East, a region known for aggressive haggling, we are never sure until the money changes hands. We can never forget Baghdad Bob, the Iraqi communications official standing on the street in the nation’s capital, telling reporters that Iraq was winning the war as U.S. military vehicles rolled behind him.
A recent inventory of ships and cargoes stuck in the Persian Gulf.
Shipping data as of last Monday, seen in the chart above, shows the number of ships trapped in the Persian Gulf by what they carry. Two-thirds of the 717 ships move petroleum products. Cargoes such as fertilizer and sulfur are included in the dry bulk feet. The number of ships carrying fertilizer products is unknown. The ship totals demonstrate the global economic disruption underway, especially in Asian countries, but it will affect the world as a whole.
The status of the ceasefire has been uncertain. Both parties stated that key points in the U.S. 15-point plan and Iran’s 10-point plan are unacceptable. We are still unsure who is negotiating on behalf of Iran and whether they can deliver on the terms of any agreement. But we do know that the Iranian military remains active and appears less inclined to bend to the rhetoric of peace.
On Wednesday, The Hill quoted Hamid Hasseini, a spokesperson for Iran’s Oil, Gas and Petrochemical Products Exporters Union, who works with the government, as telling the Financial Times that Iran wants $1 per barrel of oil passing through the Strait of Hormuz, paid in crypto. Ships are to email the Iranian authorities about what they are carrying. The ship will be assessed, and vessels will be given a few seconds to pay in crypto, which can’t be traced or confiscated due to sanctions.
This morning on LinkedIn, the Center for Multilateral Strategy and Diplomacy (CMSD) showed a map of the Strait of Hormuz and various shipping routes. According to CMSD, the IRGC Navy published a nautical chart designating anti-ship mines across the strait’s main traffic lane. The chart also shows mandatory alternative routes via Larak Island. Iran’s navy is implementing compulsory coordination windows. Vessels failing to comply risk being attacked.
Proposed shipping routes through the Strait of Hormuz.
CMSD commented: “For Iran, controlled access is strategically more durable than closure. “It preserves plausible deniability while imposing Iranian authority over a waterway that carries approximately 21% of global oil supply.”
The world is witnessing “how a state actor can leverage maritime geography to exercise coercive economic power.” This is being accomplished “without triggering the legal and diplomatic consequences of a formal blockade.” However, it is not beyond the realm of possibility that maritime power could be used against a country during a conflagration that lacks a commercial shipping fleet, such as the United States. With 80%-90% of trade moving by ship, no nation is immune to trade disruptions when maritime operations are upset or weaponized.
We have seen the impact on the oil trade when pirates off Somalia targeted tankers, or were attacked when traveling through the Red Sea to the Suez Canal by Houthis. When a ship was stuck in the Suez Canal, there was no alternative. Ships had to skip the Suez shortcut to Europe; instead, they had to travel around the Cape of Good Hope off the tip of South Africa, adding 14-16 days to journeys and inflating the cost of the delivered oil.
While most people are viewing the Strait of Hormuz as an oil disruption event. Instead, it should be viewed as a lesson in the use of maritime power to inflict harm. This will be studied as a lesson in the use of maritime power, much as warfare is changing with the use of drones.