Iran’s decision to block the Strait of Hormuz amid the ongoing attacks involving the United States and Israel has created widespread panic across global markets. The move has intensified the energy crisis in several countries as this maritime route connects the oil-rich Persian Gulf to the rest of the world. Nearly 20 to 25 per cent of the world’s oil and LNG supply, amounting to more than 20 to 21 million barrels each day, passes through this narrow passage. Amid the tensions, Iran is allowing only selected vessels belonging to countries with which it maintains friendly ties. Notably, India is among the nations permitted to transit through the route.
Rising threats and escalating tensions
Iran considers a 12 nautical mile area from its coastline as its territorial waters. The country has warned that it may target enemy ships attempting to pass through the channel. While the US has advocated for a ceasefire through a 15-point peace plan, officials believe such efforts are unlikely to yield results soon. The situation has created long queues of stranded vessels on both sides of the strait, waiting for it to reopen. Despite Iran’s threats, neither the US nor NATO countries are willing to send naval forces to directly intervene and reopen the waterway.
Why the Strait of Hormuz matters
The Strait of Hormuz is one of the world’s most critical energy corridors. It facilitates the export of crude oil and LNG from countries such as Saudi Arabia, United Arab Emirates, Qatar, Kuwait, Iraq, Bahrain and Iran itself.
Major consumers of the energy transported through this route include India, China, Japan and South Korea. These countries together account for nearly 69 per cent of the total oil and gas shipped through the strait.
As per reports, India alone imports close to 40 per cent of its crude oil and over 54 per cent of its LNG through this narrow channel. The temporary blockade has already triggered a sharp rise in global oil prices and disrupted supply chains worldwide.
Iran keeps close watch on passing vessels
It is to be noted that the Strait of Hormuz is extremely narrow and ships move through limited inbound and outbound channels. At its narrowest point, each channel is less than three kilometres wide. Lane separators are placed to prevent vessels from colliding. No ship can pass through this tight passage without coming close to Iranian territorial waters. This increases Iran’s ability to track and potentially target vessels. Due to this risk, no cargo ship is willing to cross the strait without Iran’s clearance.
Sharp decline in ship movements through Hormuz
Since the war began on February 28, Iran has reportedly targeted nearly 20 vessels attempting to enter the Strait of Hormuz without prior clearance. Tehran has maintained that only its “enemies and their allies” will face retaliation, though it has not specified which nations fall into that category. Data from analytics firm Kpler shows that ship movements through the strait have fallen sharply. Only 138 vessels, including 87 oil and gas tankers, managed to cross the passage in March. This translates to barely 5 to 6 ships a day which marks an unprecedented 95 per cent drop in traffic since the conflict escalated.
Before tensions flared, around 135-140 vessels crossed the strait daily transporting nearly one-fifth of the world’s crude supply. The International Maritime Organisation estimates that nearly 2,000 vessels are now waiting in the vicinity of Hormuz for safe passage.
Reports of heavy transit charges through ‘Tehran toll booth’
A report released by Lloyd’s List Intelligence suggests that Iran is imposing unusually high transit charges on vessels attempting to navigate the route. Foreign media reports have also highlighted what they describe as a “Tehran toll booth”, claiming that ships were being asked to pay up to 2 million dollars (around Rs 16 to 18 crore) for secure passage. However, Iran has rejected these claims.
What is confirmed, however, is that the strait is now governed through a tightly controlled corridor overseen by the Islamic Revolutionary Guard Corps (IRGC). The process begins when the shipping company contacts intermediaries linked to the IRGC and submits documents such as the ship’s identification, ownership papers, cargo details, destination and crew information. These documents go through a meticulous review by authorities and vessels carrying crude oil get preference. The ship is then screened through multiple layers of security checks in Hormozgan province, as per reports.
Clearance and escorted passage
Once a vessel is approved, it is issued a unique code along with specific navigation instructions. As the ship approaches the narrow passage, communication is done through VHF radio, where verification and tracking protocols are confirmed. Patrol boats then accompany the vessel through the tightest section of the strait to ensure guided movement under the IRGC’s supervision.
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