Tensions around the Strait of Hormuz are driving oil price volatility and exposing structural fractures in global energy markets
Is the Strait of Hormuz really open?
Oil prices are climbing again toward $100 per barrel after a sharp drop earlier this week, triggered by the announcement of a fragile ceasefire between the United States and Iran. The partial rebound reflects deep uncertainty over whether the Strait of Hormuz is effectively open.
Shipping companies remain unconvinced that the passage is safe and are still unclear about whether Iran will impose conditions on transit.
“It must be said clearly: the Strait of Hormuz is not open. Passage is subject to permits, conditions, and political leverage. This is not freedom of navigation, it is coercion,” said Sultan Ahmed Al Jaber, head of the UAE’s national oil company ADNOC.
Energy producers in the Gulf strongly oppose any agreement involving payments to Iran. Gulf monarchies argue that conditional transit violates the United Nations Convention on the Law of the Sea, which guarantees freedom of navigation through natural straits.
Iran’s demands and control over transit
Tehran is seeking control over the passage and, according to the Wall Street Journal, may introduce a tariff system for ships.
Proposals reportedly include requiring payments in cryptocurrencies or Chinese renminbi. For a supertanker carrying around 2 million barrels, fees could reach $2 million, including security escorts and administrative costs.
U.S. Secretary of State Marco Rubio has called Iran’s demands illegal, while also stating that the United States will not actively intervene to stop them. Donald Trump has even suggested a potential joint venture with Iran to manage toll collection.
For now, most shipping companies prefer to stay idle. Without clear guarantees that Iran will not attack vessels, insurance and operational risks remain too high.
Traffic remains near historic lows
According to Arab mediators, authorized ships must coordinate with the Islamic Revolutionary Guard Corps, the powerful paramilitary group designated as a terrorist organization by both the United States and the European Union.
Despite the ceasefire announcement, traffic through the strait remains near historic lows. On April 8, only four vessels were allowed to pass, compared to a pre-war average of more than 100 ships per day.
Oil price disconnect masks the scale of the energy shock
Futures prices remain far below the cost of physical shipments, which are increasingly scarce. This disconnect fails to reflect the severity of the recent energy shock.
A clear example is Dated Brent, considered the benchmark for physical crude purchased by refiners, which reached $144 per barrel this week. Meanwhile, Brent futures, after peaking near $120 last month, are now trading around $95, despite ongoing disruptions and production cuts of nearly 10 million barrels per day across the Middle East.
Analyst Vandana Hari sees this as a structural market failure. “In the long term, a fractured futures market risks becoming a playground for speculators, detached from physical barrels,” she wrote on X.
As noted by Axios, there is no single explanation for this divergence. Some market participants believe the system is too large to fail, while others anticipate demand destruction that could trigger a sharp price collapse.
Another key factor is the unpredictability of U.S. policy. Traders remain cautious, knowing that a single social media post can trigger major downward price swings.
A structural shift in the global oil market
The energy shock linked to tensions with Iran could trigger a lasting transformation in how global oil markets function, according to Axios. A system once relatively open and fluid risks becoming fragmented and increasingly politicized.
Such a shift would likely lead to higher energy prices and inflation, with broader implications for the global economy.
“This is the mother of all supply chain disruptions,” said Dan Yergin, warning that the long-term consequences could even challenge the foundations of the dollar-based global economic system.
