LONDON: Did Donald Trump think through the implications of his attack on Iran? Did he not realise that the Strait of Hormuz, a narrow maritime passage connecting the Persian Gulf to the Arabian Sea, functions as a critical artery for global energy flows and other important products such as fertilisers, crucial for the world’s agriculture? Probably not. After all, when you appoint a chat-show host as your defense secretary, an Evangelical Christian who has explicitly framed the Middle East war through the lens of his faith, making it clear that it is “Jesus versus Muhammed”, you are unlikely to get any sensible military advice. Any schoolboy or schoolgirl could have told Trump that the Strait of Hormuz, through which roughly a fifth of the world’s consumption passes, was Iran’s not-so-secret weapon which they would immediately close if attacked. But apparently not Pete Hegseth, who appears to have been totally unaware of this. Instead, this thrice-married ex-Fox news host, who has long worn his faith on his sleeve (and on his flesh—a Jerusalem cross is tattooed across his chest), colluded with Trump to start a war, which has sent shock waves across the global economy.
Importing roughly 80-85% of its oil, India is particularly exposed to the closure of the Strait, relying heavily on Gulf producers. Its economy is highly sensitive to oil price fluctuations. As in many countries, fuel costs ripple quickly through transportation, food prices, and industrial production. Inflation rises, the currency weakens and fiscal pressures mount as the government intervenes to stabilise prices. The closure of the Strait of Hormuz is not just a distant geopolitical concern for India and many countries; it has become a domestic economic trigger. What unfolds in the Strait will shape not just the trajectory of the conflict, but the stability of energy markets, the credibility of international law, and the limits of maritime power in the 21st century.
Four broad outcomes are emerging. None is clean. None is guaranteed. Each carries risks that extend far beyond the Gulf.
The first possibility, a “new normal”, is that Iran maintains its current stranglehold, not a full closure but something more ambiguous and arguably more effective, which analysts describe as a “selective blockade”: a system where fear, opacity, and selective enforcement replace formal rules. Traffic has collapsed from roughly 135 ships per day to barely a handful, yet the Strait is not closed. Instead, Iran has carved out a semi-formal transit corridor near Larak Island, under the watchful eye of the Islamic Revolutionary Guard Corps (IRGC). Ships deemed acceptable, often those linked to countries maintaining working relationships with Tehran, are allowed through. Others stay away, deterred by drones, missiles, and skyrocketing insurance premiums. The result is a maritime grey zone, where many vessels travel “semi-dark,” switching off transponders. Deals between shipping firms and Iranian authorities remain opaque, creating a system which echoes the tactics of Yemen’s Houthis in the Red Sea, but with greater scale and sophistication. Crucially, this “new normal” may already be stabilising. Ships linked to China, India, Pakistan, and Bangladesh, particularly those carrying agricultural goods, are transiting safely, and even large container vessels from major state-backed operators have begun testing the route. For Iran, the arrangement is perversely lucrative, as its oil exports continue largely unabated and with higher global prices revenues have surged. The result is that Tehran is pulling in the cash while exerting greater control. This “win-win” scenario is not peace; it is managed instability. And it could endure.
The second outcome builds on the first: Iran formalises its grip and turns it into a permanent revenue stream, thus monetising its control. Tehran has already floated the idea and officials have spoken of transit fees. Figures as high as $2 million per vessel have been mentioned, though evidence of actual payments remains thin. Iran’s parliament has reportedly approved plans to institutionalise such tolls, potentially in cooperation with neighbouring Gulf states. The logic is straightforward. If Egypt can generate hundreds of millions of dollars monthly from the Suez Canal, why shouldn’t Iran profit from one of the world’s most critical energy chokepoints? Yet the legal and political implications are explosive. Charging for passage through an international waterway would most likely violate the United Nations Convention on the Law of the Sea. More importantly, it would set a precedent that control, not law, determines access to global trade routes. The geopolitical response would be swift. The United States, under figures like Marco Rubio, has already signalled that such a move would be “unacceptable” and dangerous. But Donald Trump has repeatedly said that the US shouldn’t be primarily responsible for securing or reopening the Strait; countries that depend most on the oil should take the lead. Regional discussions have reportedly explored a multinational consortium involving Pakistan, Egypt, Turkey, and Saudi Arabia to manage flows and potentially share revenues. Whether this is a diplomatic off-ramp or a legitimisation of Iran’s position remains unclear. If implemented, the “toll booth” model could transform Hormuz into a cash machine for Tehran. But it would also risk turning a crisis into a permanent fracture in the global trading system.
The third scenario is the most dramatic: a coordinated international effort to reopen the Strait by force, or at least by overwhelming presence. Unlike past interventions, this would not necessarily be American-led, reflecting both strategic recalibration and political fatigue in Washington. Countries such as the United Kingdom, under Prime Minister Keir Starmer, are already positioning themselves at the centre of planning efforts. Naval chiefs from dozens of nations have reportedly convened to consider how such an operation might work. The model is not without precedent, as during the “Tanker War” of the 1980s, US-led naval escorts protected shipping in the Gulf. More recently, the Black Sea grain corridor, brokered under the auspices of the United Nations, demonstrated how fragile, negotiated maritime access can function even during active conflict. But reopening Hormuz would be far more complex. Any operation would likely require a ceasefire, however temporary; Iranian acquiescence, explicit or tacit; significant naval and drone assets to deter attacks; and political consensus among major powers. Absent these, an escort mission risks escalation rather than stabilisation. A single miscalculation, one drone strike or one misidentified vessel, could pull multiple countries into direct confrontation. Still, if the alternative is a fragmented, semi-lawless maritime regime, pressure for intervention will grow.
The fourth possibility is the simplest and also the least likely: a return to the status quo. The Strait reopens, ships flow freely, and markets stabilise. Closing, or partially closing, Hormuz has often been described in the past as Iran’s “nuclear option”; a measure of last resort. If that’s true, then its use suggests a level of pressure far greater than official rhetoric admits. Analysts like to argue that Iran’s actions are driven by desperation as much as strategy. Continuing to harass shipping risks provoking renewed US intervention and alienating Gulf states that might otherwise prefer de-escalation. In this view, Tehran’s maximalist demands, such as sovereignty claims, transit fees, war reparations, may be negotiating positions rather than end goals. A fast-fading agreement that restores normal shipping could be the regime’s best realistic outcome. That, at least, is the bet made by some leaders, such as Donald Trump, who has suggested that a deal reopening the strait could come sooner rather than later. But even if traffic resumes, “normal” will not mean what it once did. Insurance costs, risk assessments, and naval postures will all reflect the memory of disruption. The psychological barrier has been permanently broken.
Across all four scenarios, one conclusion stands out: disruption is here for the foreseeable future. Whether through selective blockades, monetised transit, international patrols, or uneasy peace, the era of frictionless passage through Hormuz is over; at least for now. Shipping companies, insurers, and governments are already adapting to a world where chokepoints are contested, not assumed. The IRGC’s role will remain central, as even in de-escalation scenarios, its influence over maritime security is unlikely to disappear quickly. Meanwhile, diplomatic efforts at institutions like the International Maritime Organization may yield humanitarian corridors or technical agreements, but these are incremental fixes, not structural solutions. The broader lesson is uncomfortable. Globalisation depends on invisible guarantees: safe sea lanes, predictable rules, restrained actors. When those guarantees erode, the system does not collapse overnight. It fragments. Hormuz today is a preview of that fragmentation: a place where law, power, and profit intersect in unstable ways.
So, would Iran keep the Strait closed? Levy lucrative transit tolls? Allow a return to normal shipping? Or force the world to assemble a naval coalition to finish what the Americans started? The answer is likely to be some combination of all four, evolving over time. The “new normal” may harden into semi-permanent low-level warfare. The “toll booth” could emerge in partial or informal form. International forces may hover at the edges, shaping behaviour without particularly resolving it. And moments of apparent normalcy may punctuate longer periods of tension. What is clear is that the Strait of Hormuz is no longer just a passage. It is the central arena in which the outcomes of the war in Iran will be decided, not only militarily, but economically and politically.
And until clarity emerges from the fog of war, the world will continue to navigate by uncertainty.
John Dobson is a former British diplomat, who also worked in UK Prime Minister John Major’s office between 1995 and 1998. He is currently a visiting fellow at the University of Plymouth.
