Iran’s Revolutionary Guard Corps has declared the Strait of Hormuz — a waterway through which around 20% of the world’s crude oil supply flowed until the war — closed to any ships not explicitly granted permission by Tehran, warning of a severe response for any violators.
The global price of crude oil jumped over $110 a barrel on the news Friday. Before the U.S. and Israel launched the war on Iran one month ago, a barrel of benchmark Brent crude was trading at just over $70 a barrel.
The IRGC Navy appeared to make an example of three Chinese-owned commercial vessels this week that tried — but failed — to make it through the strait and out of the Persian Gulf.
“This morning, following the false statements of the corrupt U.S. president claiming that the Strait of Hormuz is open, three container ships of different nationalities moved toward the designated corridor for authorized vessel traffic, but were turned back after warnings from the IRGC Navy,” the Iranian military said in a social media post.
Early Friday morning, data from the MarineTraffic website showed that two ultra-large container ships owned by China’s biggest shipping company, COSCO, made a sharp U-turn after apparently trying to sail past Iran’s Larak Island. The two ships, CSCL Indian Ocean and CSCL Arctic Ocean, remained in the Persian Gulf later Friday.
A third ship, the Hong Kong-owned Lotus Rising, was forced to make a similar turnaround further out from the same island the previous day.
Larak Island has been described as Tehran’s “toll booth” by analysts at maritime intelligence company Lloyd’s List. It’s just a few miles off Iran’s coast, and Tehran has been forcing ships to pay fees to pass safely — as much as $2 million for one vessel, according to Iranian state media.
Lloyd’s List says it tracked 33 transits via Larak Island in the second half of March, but no transits at all via the more common route further south through the strait. Put another way, while the Strait of Hormuz has been described as a chokepoint for oil coming out of the Persian Gulf, the route past Larak has become the specific chokepoint of Iran’s chokehold on the passage.
Adding further pressure, an Iranian military official was quoted recently by the Islamic Republic’s state-run media as saying another strait vital to world oil supplies could be targeted next. The Bab el-Mandeb Strait is the southern gateway from the Red Sea into the Arabian Sea and all points beyond. An estimated 10% of the world’s oil supply flows through the passage, which is bordered by Djibouti to the south and Yemen to the north.