The crisis surrounding the Strait of Hormuz is becoming a new test of US calculations in the region, amid continuing tensions with Iran and a decline in oil tanker traffic through one of the world’s most important maritime routes for energy supplies.
While US President Donald Trump’s administration insists on restoring the strait as a freely accessible international passage, conditions on the ground appear far more complicated. The war has demonstrated that Tehran is capable of disrupting maritime traffic, while the United States lacks the practical ability to guarantee the strait remains fully open without incurring mounting military and economic costs.
Against this backdrop, The New York Times published an article by Rosemary Kelanic, director of the Middle East Program at Defence Priorities, who concluded that reopening the strait remains the least bad option, even if doing so requires allowing Iran to impose transit fees on vessels passing through it.
Kelanic argues that the US president must confront the reality that neither of the two outcomes promoted by his administration, whether effectively turning the Strait of Hormuz into “US territory” or fully restoring it as a free international corridor for global oil supplies, is achievable.
She considers such an outcome a defeat for the United States, but still the least damaging option under current circumstances. The war with Iran, she argues, has revealed two fundamental realities: Iran cannot completely close the Strait of Hormuz, and the United States cannot completely open it.
Despite Tehran being subjected to months of US bombing and missile strikes, Iran has demonstrated its ability to disrupt oil tanker movements through the strait, which carried around one-fifth of global oil supplies before Trump launched his attack on Iran in February.
Geography Makes Full Control Difficult
The geography of the Strait of Hormuz makes securing complete control particularly difficult. The narrow and hazardous waterway stretches for about 90 miles and is shaped like a horseshoe, giving the states bordering it, Iran to the north and Oman to the south, the potential ability to disrupt maritime traffic.
The strait’s rugged coastline also provides ideal cover for Iranian precision-guided missiles, drones and attack boats, allowing Tehran to threaten vessels through hit-and-run tactics that cannot be decisively eliminated.
Iran can also produce such weapons at relatively low cost and in effectively unlimited quantities, making Iranian attacks a persistent risk for vessels crossing Hormuz, a danger that even negotiated agreements with Tehran would be unable to remove entirely.
Because of these risks, private shipping companies have been reluctant to place their crews and cargoes in danger under less than ideal security conditions. This has allowed Iran to restrict traffic without having to attack every vessel attempting to pass through the strait.
Even with US military assistance that has depleted ammunition stockpiles and placed additional strain on naval forces, only around five million barrels of oil per day have crossed the strait without explicit Iranian approval, compared with about 20 million barrels per day before the war began.
Kelanic warns that the continuation of US-led operations aimed at moving oil through Hormuz despite Iranian restrictions would carry the risk of American casualties, while also imposing substantial financial costs on US taxpayers.
From this perspective, she argues that it is reasonable for the American public to question why it should bear the cost of guaranteeing free passage for countries that show little willingness to help secure the strait, particularly when those countries could cover such costs themselves through transit fees.
Transit Fees Versus Partial Closure
Financially, Kelanic argues, transit fees would be a better option for both the United States and the wider world than allowing the strait to remain partially closed.
Although the resilience recently shown by global oil markets surprised many observers, the daily supply shortfall, which reached 14 million barrels at the height of the war, caused a major drawdown in global crude oil and petroleum product inventories.
This gradually depleted the emergency reserves that had prevented oil prices from rising by more than relatively modest amounts compared with pre-war levels.
If continuing tensions around the Strait of Hormuz trigger a sharp rise in oil prices, the economic consequences could be severe, particularly for the United States, whose economy remains far more dependent on oil than those of other major powers such as Russia and China.
Kelanic argues that imposing transit fees in the Strait of Hormuz, while potentially embarrassing for the United States and for Trump personally, could create an incentive for Iran to allow as many vessels as possible to pass in order to maximise revenue from those fees.
Iran’s dependence on income generated through managing the strait, she adds, could also make it more difficult for Tehran to close the waterway in the future for political reasons.
Possible Joint Management With Oman
Kelanic notes that Iran is already holding discussions with Oman regarding the future of the strait.
She argues that joint management of the waterway could strengthen regional cooperation and encourage Iran to demonstrate greater responsibility by moderating its rhetoric and conduct.
In her assessment, such a development could eventually pave the way for Iran’s return to the international community, providing Tehran with a form of recognition that could make it easier to abandon its nuclear programme, which currently serves as an alternative source of status and prestige.
Kelanic does not deny that transit fees would financially benefit Iran. However, she notes that even high-end estimates of such revenues would not compensate Tehran for the losses it sustained during the war, which she places at $270 billion.
According to some estimates, Iran could collect between $6 billion and $14 billion annually in transit fees, meaning it could take nearly 20 years to recover the financial cost of the war.
During that period, market changes are expected to reduce the importance of the Strait of Hormuz, as exporters in the region build alternative pipelines and oil demand declines amid the shift towards electric vehicles.
Could Hormuz Set a Precedent?
Kelanic acknowledges that allowing Iran to control the Strait of Hormuz could establish a troubling precedent and potentially encourage other countries bordering strategically sensitive maritime routes to seek similar control.
However, she argues that developments in Hormuz are likely to remain largely confined to the strait because its unique geography and its market importance for transporting Arabian Gulf oil are not matched by any other major waterway.
Kelanic does not believe the Houthis in Yemen are realistically capable of replicating Iran’s strategy in Hormuz.
She notes that the Houthis control only a small portion of the Red Sea coastline, while their missile, drone and targeting capabilities remain significantly weaker than Iran’s.
The Houthi campaign against Red Sea shipping between 2023 and 2025 reduced the number of maritime voyages through the area, but large quantities of cargo continued to pass through the route.
Most Houthi attacks also caused little or no damage, while shipping companies had a practical alternative by rerouting vessels around the Cape of Good Hope, adding only marginal fuel costs of around $1 million per ship.
Kelanic links this situation to an argument made by prominent sociologists that all forms of taxation fundamentally resemble forms of coercive protection, or extortion in exchange for security.
History, she notes, shows that actors capable of providing security, or threatening consequences within a particular geographic area, often go on to exercise political authority and collect taxes there.
From this perspective, Iran has already demonstrated that it possesses a substantial degree of control over the Strait of Hormuz.
Kelanic argues that this situation may not be ideal for the United States, but accepting the new reality as soon as possible would, in her view, serve the interests of consumers, the global economy and regional stability.
She further suggests that the long-term consequences of permanent Iranian dominance over the Strait of Hormuz may ultimately discourage future US presidents, or Trump himself, from launching risky and unnecessary wars.
