An unwinnable standoff at Hormuz

An unwinnable standoff at Hormuz

Five months into the U.S.-Iran war, the real winner isn't either combatant — it is every pipeline, port, and producer that doesn't depend on the strait.

The pattern by mid-July 2026 is grimly familiar. U.S. Central Command announces another wave of strikes, the ninth consecutive night, at 02:00 GMT on Monday, July 20, targeting "Iranian military command centers, air defense and coastal surveillance sites, maritime capabilities, missile and drone launch sites, and communications networks." Within hours, Iran's Islamic Revolutionary Guard Corps (IRGC) reports that two oil tankers "exploded" in the southern strait while attempting to transit what it calls an unsafe corridor under "U.S. coercion." The IRGC warned that "this passage is unsafe for the transport of chemical fertiliser or even a single drop of oil and gas" as long as American military operations continue. Al Jazeera

Each side is doing what its military logic dictates. Neither is winning. The strait carries roughly a fifth of the world's seaborne oil and a similar share of global LNG: approximately 20.9 million barrels per day of crude oil and petroleum products in peacetime, according to the U.S. Energy Information Administration. EIA But commercial transit has collapsed. Just 22 ships crossed on July 9, compared to 147 crossings the day before the war began, according to commodities tracker Kpler. Some days recorded as few as six vessels. NPR The International Energy Agency has described the resulting supply disruption as "the largest in the history of the global oil market" — three times larger than the 1973 Arab oil embargo. Brookings

The military logic of a stalemate

U.S. firepower can degrade Iranian coastal defenses, and has done so repeatedly. CENTCOM has now struck over 80 targets in a single night, hitting air defense systems, coastal radar, and more than 60 IRGC small boats in one wave alone. BBC But as Vice President JD Vance reportedly observed, stripping away radar, drones, and missiles does not eliminate Iran's capacity to threaten shipping with small boats, mines, and short-range fire — asymmetric tactics that survive the degradation of conventional capabilities. Asia Times

Iran, for its part, cannot hold the strait closed indefinitely. A genuine closure would sever its own oil exports and invite far harsher retaliation. The previous U.S. naval blockade, from April 13 to June 18, brought Iran's oil exports to zero. Iran's parliament speaker and lead negotiator Mohammad Bagher Ghalibaf acknowledged bluntly: "We did not export even one barrel." Al Jazeera The rial has collapsed to a new all-time low of over 1.93 million against the dollar. Inflation — already among the world's highest — has seen the price of chicken, eggs, and cooking oil more than triple compared to a year ago. Al Jazeera

What both sides can do is make the strait too dangerous to be useful — which is functionally what has happened. And the ceasefire that briefly offered an exit collapsed because neither side could accept the other's terms for what "normal" would look like afterward.

The 14-point Memorandum of Understanding signed on June 17 contained deliberately ambiguous language suggesting Iran would manage traffic and potentially charge fees in the future. Tehran seized on this as validation of its sovereignty claim; Washington read it as a limited concession to stop the shooting. NPR

The real winner, as predicted, isn't either combatant — it's every pipeline, port, and producer that doesn't depend on the strait. Source: Financial Times — Brent Crude Oil (IB.1:IEU) historical prices