The 2026 Hormuz crisis demonstrated that control of strategic chokepoints can be used not only to disrupt global flows, but also to rewrite the terms on which access is granted
On 28 February 28 2026, Iran closed the Strait of Hormuz. The short-term policy debate has focused on oil prices and energy diversion. However, both are symptoms of a wider strategy. The Strait is the most important oil transit route, with 20 percent of global seaborne oil passing through it daily, and submarine cables running through the narrow seaway, such as AAE-1 and FALCON, which also carry critical data streams between the Gulf, South Asia, and Europe. Consequently, the blockade was not a unidimensional act. It was designed as a strategic chokepoint, subjecting digital connectivity and energy supply to the same domain of coercive control.
Iran's closure is not an isolated action but a replicable model: any state with geographic command over a critical node now has a working template.
Iran’s closure of the Strait constitutes a deliberate act of connectivity coercion, leveraging its geographic position to generate structural leverage, impose asymmetric costs, and demonstrate that control over physical infrastructure remains a key tool of statecraft. Iran's closure is not an isolated action but a replicable model: any state with geographic command over a critical node now has a working template.
Figure 1: Before and after: shipping withdraws from Hormuz within 48 hours of the blockade
Source: Polestar Global Purpletrac and Kuow/NPR
The Strait of Hormuz is one of the most strategically significant marine routes. It facilitated the transport of 20 million barrels of crude oil and petroleum products each day in 2025, or about 20 percent of the world's petroleum liquids consumption. Iran's blockade brought that flow to a halt.
It also revealed a second vulnerability that received far less attention. The same corridor is used by submarine cable networks, including AAE-1, FALCON, and Gulf Bridge International, to transport financial communications and internet traffic between South Asia, the Gulf states, and Europe. Iran's dominance over the Strait subjected digital connectivity and energy supply to the same coercive leverage, with little redundancy available to either system. This was not an incidental detail. It formed the structural foundation for the connectivity coercion that characterised Iran’s strategy.
The commercial ramifications of the war in West Asia were immediate. About 90 percent of regular traffic was redirected, war risk premiums made transportation commercially unfeasible for compliance operators, and marine insurers withdrew coverage for the route within hours of the closure. On both sides of the Strait, about 600 oil, gas, and container ships were left stranded. None of those restrictions applied to shadow tankers. They continued to transit the Strait uninterrupted, operating without Western insurance, flag state duties, or P&I club membership. Over half of all tanker and gas carrier movements above 10,000 dwt between March 1 and 10 were accounted for by shadow fleet vessels, according to Lloyd's List.
The Strait of Hormuz is one of the most strategically significant marine routes. It facilitated the transport of 20 million barrels of crude oil and petroleum products each day in 2025, or about 20 percent of the world's petroleum liquids consumption.
The pattern of access reveals the nature of the barrier. This closure was not arbitrary. It was a differential access mechanism that excluded complying actors from the corridor while granting priority access to those operating outside the Western-dominated maritime system. Iran did more than shut down the Strait. It reorganised access to it, turning the world’s most important maritime chokepoint into a toll booth for connectivity under its exclusive control. The shadow fleet was more than proof of sanctions evasion; it was the tool of that reorganised access.
The blockade has significant commercial repercussions. Early in March 2026, freight costs for Very Large Crude Carriers crossing the Strait increased by more than 600 percent, surpassing US$ 14 a barrel. On March 3 alone, freight rates for transporting oil from the Middle East to China increased by 94 percent to US$423,736 a day. Throughout the disruption, Iran's oil exports remained at 1.5 to 1.6 million barrels per day, bringing in an extra US$ 140 million every day. These numbers are significant. However, they are not the focal point.
One byproduct was revenue. Compellence was the strategic goal. Iran stipulated that travel across the Strait would only be allowed under the control and coordination of its Ports and Maritime Organisation until the ceasefire was reached in April 2026. Recognition of Iranian control over a waterway that transports one-fifth of the world's oil traffic was a prerequisite for its reopening. Iran did not restore access. It granted it, on its own terms.
The act of granting rather than restoring access is the central implication of Iran's strategy: a state in command of critical infrastructure does not need military parity or diplomatic capital to reshape the terms of global connectivity. What Iran demonstrated was categorically different. By controlling the conditions under which the Strait reopened, it did not avoid the rules governing global connectivity. It rewrote them. This distinction matters because the entire architecture of Western sanctions enforcement assumes a reactive adversary—one that evades, circumvents, and absorbs pressure. Iran did none of that. It generated pressure of its own, using geography as an instrument. The Strait did not reopen because enforcement succeeded or diplomacy prevailed. It reopened because Iran chose to reopen it, on conditions it set, through an institution it controls. No enforcement mechanism in the existing sanctions toolkit was designed to counter that form of leverage. The coercion was not incidental to the closure. It was the point of it.
Western enforcement was making significant progress by the beginning of 2026. At least seven shadow tankers had been apprehended or boarded by the United States (US), the United Kingdom (UK), France, and India since December 2025. Legislation to increase the sanctions authority against shadow fleet vessels and their operators had been proposed by the US Senate. There was increasing pressure on flag states to de-register ships that did not comply. The tools were imperfect, but the direction of travel was clear
Iran proved that a sanctioned state in command of a critical chokepoint can convert military escalation into structural leverage over global connectivity, compel the rerouting of world trade, and coerce the enforcer of the sanctions regime into suspending its own rules.
The conflict almost immediately reset that momentum. Citing the need to stabilise world oil prices, the Trump administration obtained waivers through the Office of Foreign Assets Control in March 2026 for the sale of Iranian and Russian oil already loaded on vessels. At a time when the crisis was already driving up prices, the ruling essentially gave sanctioned oil temporary legal access to the market. The Council on Foreign Relations argues that, instead of driving down prices, the waivers made Iran and Russia price-setters rather than price-takers.
Iran's chokepoint leverage was sufficiently embedded in the structure of global connectivity that the state administering the sanctions regime was compelled to suspend its own enforcement. The coercion did not operate only on markets. It operated on the political will of the enforcer. That is the implication towards which this section builds: an enforcement architecture designed to penalise evasion has no adequate response to leverage. When the adversary controls the node, pressure does not accumulate on the target. It shifts to the enforcer. The sanctions toolkit, as it currently stands, was not built for that inversion.
The events of February and March 2026 were not an anomaly. They were a demonstration. Iran proved that a sanctioned state in command of a critical chokepoint can convert military escalation into structural leverage over global connectivity, compel the rerouting of world trade, and coerce the enforcer of the sanctions regime into suspending its own rules. The model is readily replicable. Any state controlling a comparable chokepoint now has a working precedent to draw upon. The West retains enforcement tools, but those tools were built for a world in which adversaries evade the connectivity order. They were not designed for adversaries who weaponise it.
Veer Puri is a Research Assistant with the Centre for New Economic Diplomacy at the Observer Research Foundation.
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Veer Puri is a Research Assistant with ORF’s Centre for New Economic Diplomacy. At ORF, his research focuses on the Blue Economy and connectivity, with particular ...
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