A month after his war against Iran, US President Donald Trump is now scrambling to find something that was once insecure—the Strait of Hormuz—and turn it into the heart of the war’s end.
Iran, or more specifically its Islamic Revolutionary Guard Corps (IRGC), has taken effective control of the country’s most important shipping and charcoal shipping route, which typically carries a fifth of the world’s oil and natural gas and even more of its fertilizer and helium.
A month after his war against Iran, US President Donald Trump is now scrambling to find something that was once insecure—the Strait of Hormuz—and turn it into the heart of the war’s end.
Iran, or more specifically its Islamic Revolutionary Guard Corps (IRGC), has taken effective control of the country’s most important shipping and charcoal shipping route, which typically carries a fifth of the world’s oil and natural gas and even more of its fertilizer and helium.
Iran has ever threatened for decades to close the strait, and American war planners have spent decades preparing for just that—and it has yet to be effectively closed. Sailing throughout the month of March do not include what was happening every day. Oil prices rose again early Thursday, reaching more than $107 a barrel as the impact of millions of barrels of lost crude began to be felt by a global economy that consumes more than 100 million barrels of the commodity each day.
What’s interesting about Iran’s emphasis on Hormuz is how different it is from the handicaps that Iran supported. The Houthis provided on shipping traffic in the Red Sea between 2023 and 2025. The Houthis attacked ships and threatened them to take alternative routes, and traffic has never recovered. (The Houthis could still enter this battle; they haven’t yetbut if they do, one of the main channels of Saudi oil sales will be cut, with a more negative effect on the oil market.) Iran has attacked several ships – almost. 16 so far-which is why ship owners are reluctant to risk passage, and why marine insurance rates have risen.
But that is not Iran’s final vision for controlling the Strait of Hormuz.
Since mid-March, Iran has turned the Strait of Hormuz into a “tollbooth,” according to Mind of Lloyd’s Lista major maritime information and analysis company—redirecting ships from the normal, well-separated two-lane route in the middle of the strait to an alternative route closer to the Iranian coast, between the islands of Qeshm and Larak. The IRGC checks the ship’s nationality, ownership, cargo, and crew, and if it gives permission, then the ships can pass through the channel. Lloyd’s List estimates that two dozen have used the method so far.
Some have even had to pay for the privilege—at least two so far, according to Lloyd’s, with taxes estimated at $2 million per ride. Others, like Indian oil tankers filled with cooking gas, got it free passage as a diplomatic move, and ships exporting Iranian oil don’t have any trouble at all.
It’s early days, and only a few ships have taken the alternative route out – and a few have paid – but that could be the new normal.
“It’s certainly possible that Iran could turn it into a tax haven, both operationally and technically, if countries are willing to pay. I have a hard time believing that the United States will comply,” said Josh Lipsky, executive director of the Center for Geoeconomics at the Atlantic Council.
More ships can pay. Lipsky and his team have seen a notable uptick in transactions on China’s alternative payment system—CIPS—that it monitors report of Iran’s demand for oil payments (and taxes) to be settled in Yuan. CIPS activity is at an all-time high this March and higher than at any time in the past year.
Iran laid out its new vision for maritime management letter to the International Maritime Organization earlier this week, when it said that ships from “non-hostile” countries could pass through the narrow waterway, as long as they complied with Iran’s demands. Iran likes the concept so much that turning the Strait of Hormuz into a Suez Canal-style cash machine has become. one of his needs in the initial negotiations with the United States.
Blocking passage through an international channel is against international law—the United Nations Convention on the Law of the Sea is very clear about it—but although Iran signed the treaty, it never ratified it (as did the United States).
“This is all illegal,” Lipsky said.
Beyond the abstraction of international law, there are concrete rules that shipowners are concerned about when it comes to Iran’s new tariffs, Lloyd’s noted. Paying money to Iran could violate US sanctions, both in the oil sector and for providing material support to a foreign terrorist organization (as the US has designated the IRGC). Britain and the European Union have also imposed restrictions on that type of thing, which makes many shipping companies reluctant to rely on Iran’s new Q line. (The Q route is a safe route through a minefield or other forbidden route.)
With the Strait of Hormuz at the heart of Trump’s war on Iran, more geography lessons are on the way. First, and for decades, Trump had his eyes on Iran Kharg Islandwhich handles about 90 percent of Tehran’s oil sales. Now, though, attention is shifting to a few other islands near the strait itself: Big Tunb, Little Tunb, Abu Musa, and Larak. (Tunb and Abu Musa are occupied by Iran but claimed by the United Arab Emirates in a decades-long territorial dispute.)
The islands are becoming increasingly important not only because they sit along the route, but also because the US Navy will arrive in the area starting March 27. USS. Tripoliwith about 2,200 Marines, will be the first at the station, followed early next month by the USS Boxer and another expeditionary force. Axios report that the small islands eliminate Kharg as a possible target for the Trump administration’s “final blow” to open the strait and end the war.
And when Israel claimed Thursday they have killed IRGC commander responsible for operations in the Strait of Hormuz, Iran has shown in the past year increase decentralization its military command and control. The administration has spent 40 years prepare for operations in the strait, including missiles, mines, small boats and drones, and has asymmetric advantageespecially against a US rival with a dwindling navy with no mines currently in the region.
Iran has spent decades threatening to use its hegemony in the world’s most vulnerable region, and now it has discovered a potentially lucrative way to take advantage, even if it runs afoul of international law.
Unless and until the United States — and any allies that eventually join — open that channel, diplomatically or forcefully, Iran’s new power will be the new normal. That is the legacy of the four-week war.
