The Strait is closed

On Monday, a senior IRGC official confirmed the Strait of Hormuz was closed and threatened to set ablaze any ship that attempted to pass. Ship-tracking data shows tanker traffic dropped 70% on Saturday, and by Sunday not a single tanker was broadcasting AIS signals in the strait. At least five tankers have been hit, two crew members killed, and over 150 vessels are anchored in open Gulf waters, waiting.

The numbers matter. Roughly 20% of the world's oil passes through the strait, some 20 million barrels a day. Also a fifth of global liquefied natural gas, including 30% of Europe's jet fuel supply. Freight rates for VLCC supertankers hit an all-time record of $423,736 per day, a 94% jump from Friday. Brent rose 10-13%, and analysts project it could reach $100 per barrel if the disruption drags on. Major marine insurers, including the American Club, Gard, Skuld and NorthStandard, scrapped war risk cover for vessels in the region.

Maersk, Hapag-Lloyd, CMA CGM and MSC suspended transits through Hormuz. Ships are rerouting around the Cape of Good Hope, adding weeks to each journey. There are partial alternatives: Saudi Arabia can pipe around 5 million barrels a day through a Red Sea pipeline; the UAE can move 1.5 million through Fujairah. But these are patches. Iran itself has no way to export without crossing Hormuz. It is an economically suicidal play, but coherent with the logic of a regime that has already lost its supreme leader and much of its chain of command: if it goes down, it takes the global energy market with it. The operational question is how long it can sustain the blockade before the US Navy opens it by force.