Iran grip on trade is a potent weapon , but it has an expiry date | US - Israel war on Iran

What Happened

Iran has significantly restricted commercial maritime traffic through the Strait of Hormuz, utilizing its geographic position to exert economic pressure amid ongoing conflict with the United States and Israel. According to IMF PortWatch data, transit volume through the strait dropped by approximately 96 percent between 2025 and August 2, 2025, with daily tonnage falling from 3.5 million to 143,000 metric tonnes. This disruption, characterised by the threat of missiles, mines, drones, and vessel seizures, has remained sustained since February 28, 2025.

Key Actors

Why It Matters

The Strait of Hormuz is a critical global chokepoint, handling approximately one-quarter of global seaborne oil trade and significant volumes of LNG, fertilisers, and helium essential for semiconductor production. Sustained disruption threatens global energy prices, food security in nations like India, and the development of high-tech infrastructure in Gulf states, while simultaneously pressuring international actors to seek de-escalation with Tehran.

Watch For

Monitor for potential shifts in Gulf state infrastructure investments, specifically the expansion of alternative pipeline routes by Saudi Arabia and the UAE to bypass the strait. Additionally, observe the long-term impact of sustained trade disruption on Iranian domestic inflation and the efficacy of the US-led blockade on Iranian southern ports.