Hormuz Hostilities Put Global Trade in the Crossfire
The confrontation over the Strait of Hormuz is being presented as a dispute about freedom of navigation. In reality, it is becoming a struggle over which military power gets to control—and potentially profit from—one of the world’s most important commercial waterways.
On July 7, Iranian forces attacked three commercial vessels traveling in or near the strait, sharply increasing the danger to civilian shipping. Tanker traffic subsequently slowed to near a standstill as shipowners and crews assessed the risk of further attacks.
The attacks were reckless and indefensible. Commercial crews should not be used as bargaining chips in disputes between governments. Yet the United States’ response has not produced greater stability. Instead, Washington and Tehran have entered another cycle of threats, attacks, retaliation and economic coercion—each claiming that its own military power is necessary to keep the strait open.
Before the latest escalation, US officials demanded that Iran publicly declare that all shipping lanes through the Strait of Hormuz were open and that commercial vessels would no longer be targeted. Iranian representatives reportedly told American interlocutors that the attacks had been a mistake and blamed a hard-line faction seeking to derail negotiations. Washington rejected private assurances as insufficient and warned that Iran faced serious consequences if it did not make a public commitment.
That explanation should concern everyone. Either Iran’s government cannot reliably control the forces capable of attacking civilian ships, or it is using those forces to create plausible deniability while increasing its negotiating leverage. Neither possibility offers the predictability required to protect international shipping.
Iran’s public rhetoric has been even more alarming. Supreme Leader Mojtaba Khamenei has vowed revenge for the death of his father, Ayatollah Ali Khamenei, during the war with the United States and Israel. Framing retaliation as an unavoidable national obligation makes diplomacy more difficult. Revenge has no clearly defined objective or endpoint. It can be invoked to justify almost any future attack, long after the original event.
But Washington’s approach also deserves scrutiny.
President Donald Trump has announced the reimposition of a blockade on Iranian shipping and proposed charging other ships a 20 percent fee for US-protected passage through the strait. The proposal has drawn international objections, including concerns that no country has the legal authority to impose such charges in an international waterway.
Iran has attempted to claim authority over which vessels may pass and which routes they must use. The United States is now answering that attempted control regime with one of its own.
Neither policy amounts to genuine freedom of navigation.
Civilians Pay for Military Leverage
The Strait of Hormuz is not merely a strategic square on a military map. It is a commercial artery connecting energy producers, shipping workers, manufacturers and consumers across the world.
When governments threaten shipping in the strait, the economic consequences do not remain confined to Iran, the United States or the Gulf states. Disruptions raise transportation and insurance costs, increase pressure on oil and gas prices and create uncertainty throughout global supply chains.
Those costs eventually reach ordinary people through higher prices for fuel, electricity, food and manufactured goods. Poorer countries that depend heavily on imported energy are particularly vulnerable.
This is a recurring feature of the war economy: political leaders treat military escalation as a demonstration of strength, while civilians absorb its costs. Sailors face physical danger. Families confront higher living expenses. Public budgets are redirected toward military deployments, weapons and emergency energy measures rather than housing, healthcare, education or climate resilience.
Even when governments describe their actions as defensive, the infrastructure of escalation continues to grow.
The Failure of Coercive Diplomacy
The United States and Iran appear to believe that escalating pressure can improve their positions at the negotiating table. Iran attacks or restricts shipping to demonstrate that it cannot be ignored. Washington responds with sanctions, military strikes and threats intended to show that Iran cannot impose costs without paying a greater price.
This strategy is sometimes described as “escalating to negotiate.” But it carries an obvious danger: each side must convince the other that it is willing to go further. The result is a contest in which backing down becomes politically humiliating and miscalculation becomes increasingly likely.
The June memorandum intended to reduce hostilities already contained competing interpretations. Iran reportedly believed it retained authority to regulate routes through the strait, while Washington understood the agreement as guaranteeing broad and unrestricted passage.
An agreement built on unresolved ambiguity is not a durable peace agreement. It is a pause during which each side prepares to accuse the other of violation.
The public language surrounding the dispute further narrows the space for compromise. American warnings that Iran will not have “a good outcome” if it refuses US demands may satisfy audiences seeking a show of strength. They also allow Iranian leaders to portray any concession as surrender to an ultimatum.
Iranian promises of vengeance serve the same destructive purpose. They transform negotiable political decisions into matters of national honor and martyrdom.
A Peace-Economy Alternative
A durable arrangement for the Strait of Hormuz cannot depend on unilateral Iranian control, American military protection or competing systems of tolls and permits.
Oman has already offered the outline of a less militarized approach. It opened temporary shipping routes, required vessels to maintain safety and communications procedures, and stated that no tolls would be charged.
That approach should be expanded into an internationally supervised navigation agreement containing clear obligations for every party.
Such an arrangement should include:
- an unconditional prohibition on attacks against commercial vessels;
- independently monitored shipping corridors;
- direct crisis-communication channels among Iran, Oman, the United States and neighboring Gulf states;
- transparent investigation of attacks on ships and civilian crews;
- reciprocal, staged sanctions relief linked to verifiable compliance;
- and negotiations on the nuclear issue separated from immediate maritime safety measures.
The first priority must be protecting civilian life and preventing a regional war. Maritime access cannot be treated as a prize granted by whichever government possesses the strongest navy or the greatest capacity for retaliation.
Iran must stop attacking and threatening commercial vessels. The United States must also abandon the idea that military dominance gives it the right to turn an international waterway into an American-controlled security franchise.
The Strait of Hormuz should not become a tollbooth for militarized power.
Real freedom of navigation requires rules that apply to everyone, monitoring that is not controlled by a belligerent party and diplomacy that offers both sides a path away from humiliation and escalation.
Without those protections, every ship entering the strait becomes a potential pawn—and people far beyond the Gulf will continue paying the price.
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