Iran Keeps Closing the Strait of Hormuz—So Why Aren't Governments Panicking Hike Like They Used To?

The United States-Iran hostilities continued over the weekend. The US, through its Central Command, announced attacks on Iranian soil while the Islamic Revolutionary Guard Corps (IRGC) targeted American bases in the Middle East.

On X (formerly Twitter), the US Central Command announced, 'At 5 p.m. ET today, U.S. Central Command forces began launching more strikes against Iran to continue degrading their ability to attack civilian mariners and commercial ships freely transiting the Strait of Hormuz. The Commander in Chief has directed the strikes to hold Iranian forces accountable.'

US leadership insists that the Strait of Hormuz is still open, contrary to Iranian reports that the body of water has been closed following renewed US attacks.

Strait of Hormuz Closure Is Losing Leverage

The Strait of Hormuz is an integral part of world trade. About 20% of the global oil and liquefied natural gas passes through the strait. Prices of gas and fuel jumped as much as 17% shortly after the first time Hormuz closed.

While the waterway remains an essential geopolitical channel, the US-Iran war prompted other governments to find alternative routes or energy sources. Every new closure still spikes gas and fuel prices, but no longer as much.

In the recent military exchange, reports state that Brent crude surged to $80 (£59.79) on Sunday. It was in the low $70s (£50s) during the supposed ceasefire. But during the first Hormuz closure, Brent crude was hovering near $120 (£89.68).

What Prompted the Recent Closure?

Iran closed the Strait of Hormuz after a vessel used an unauthorized route within the waterway. Iran fired a warning shot against several ships but hit a Cyprus-flagged container vessel.

Tehran threatened the already tenuous Islamabad Memorandum of Understanding, which was basically a ceasefire, paving the way for more formal peace talks. The State's action prompted the US to begin its third round of strikes. Explosions in Bandar Abbas and Sirik, which border the Strait, were reported by Iran state media.

In retaliation, Iran claims attacks on US military sites in Bahrain, Kuwait and Jordan. The US side also reportedly launched military action in the port city of Jask and Qeshm Island.

'The retaliation operation will continue,' said the IRGC. Meanwhile, the US CENTCOM reports that it has hit dozens of targets during its third round of strikes.

'US CENTCOM completed a new wave of offensive strikes against Iran, July 12, hitting dozens of targets at multiple locations with precision munitions... CENTCOM forces struck Iranian military air-defense systems, coastal radar sites, missile and drone capabilities, and small boats using US fighter aircraft, naval vessels, one-way attack aerial drones, and one-way attack sea drones for the first time,' a CENTCOM press release read.

Who Controls the Waterway?

Further, the US emphasised that the waterway remains open: 'Iran does not control the Strait of Hormuz. It remains an international waterway. US forces are positioned and prepared to keep it that way.'

As an international channel, the Strait of Hormuz is not owned or controlled by any single entity. However, due to the narrow body of water, the territorial limits extend to the countries that border it—Iran to the north and Oman to the south.

Repeated closure of the Strait and Iran's ongoing threats of closing it when it suits them led to the use of alternative export pipelines, slowly eroding Iran's tactics.