On March 21, 2026, the petroleum product tanker META 4 was struck by lightning at Sultan Qaboos Port in Muscat, Oman when it was entering Muscat Anchorage.
Elke Scoliers | Getty Images
President Donald Trump on Sunday ordered a naval blockade of the Strait of Hormuz, dimming hopes for a quick end to the Middle East conflict and escalating a standoff with Iran that has already triggered one of the worst energy shocks in history.
U.S. Central Command said in a statement that the blockade will go into effect at 10 a.m. ET on Monday, targeting ships from all countries entering or exiting Iranian ports and coastal areas, including the Arabian Gulf and Gulf of Oman.
Tanker traffic through the strait began to trickle after a two-week cease-fire announced by President Trump last week, but stopped again within hours of Trump’s announcement, according to Lloyd’s List Intelligence. At least two boats that appeared to be headed for the exit turned back.
Oil prices soared as investors scrambled to set oil prices as Persian Gulf supplies tightened further. US WTI futures May delivery rose more than 8% to $104.40 per barrel. brent crude oil It rose more than 7% to $101.86.
President Trump’s order came after 21-hour negotiations between Washington and Tehran over the weekend broke down without agreement on issues such as Iran’s nuclear program, control of its waterways and Israel’s continued offensive against Iran-backed Hezbollah in Lebanon.
Oil shock becoming more serious
About a fifth of the world’s oil passed through the Strait of Hormuz before the United States and Israel launched their attack on Iran on February 28. The flow has since slowed, disrupting supply chains for oil, fertilizers, apparel and industrial products. Analysts have warned that even after the resolution, the backlog could take weeks to clear.
A complete lockdown would further intensify the pressure. “If you take more oil out of the market, especially the only oil that’s currently coming out of the Persian Gulf, you’re going to see oil prices go even higher…to about $150 (per barrel),” Trita Parsi, executive vice president of the Quincy Institute for Responsible State Strategy, said Monday on CNBC’s “The China Connection.”
All these moves should be treated as negotiating tactics and threats, as neither side has clearly stated that negotiations will not resume or that the ceasefire has ended.
Trita Parsi
Executive Vice President, Quincy Institute for Responsible National Strategy
Ben Emmons, managing director at Federal Watch Advisors, said that in addition to crude oil, commodity prices for fertilizer and helium, which are critical inputs for food production and semiconductor manufacturing, are likely to continue rising, likely fueling already accelerating inflation.
IMF and World Bank officials last week cut their global growth forecasts, signaled they would raise inflation forecasts and warned that emerging markets would be hit hardest.
“Supplies may remain tight in Asia’s emerging economies due to the economic scars from attacks on energy facilities and ports in Iran and other Gulf states,” Barclays said. “It remains to be seen how quickly oil and gas extraction, refining and loading can normalize.”
The month-long disruption in the Strait of Hormuz has sparked warnings of an energy shortage worse than the oil crisis of the 1970s. At the time, an embargo on U.S. allies by Arab producers quadrupled oil prices and prompted fuel rationing across major economies.
On March 11, 2026, in Mumbai, India, the Liberian-flagged crude oil tanker Shenron Suezmax successfully navigated the highly dangerous Strait of Hormuz and entered the Port of Mumbai amid the intensifying conflict in West Asia.
Hindustan Times | Getty Images
Fatih Birol, head of the International Energy Agency, said last week that the disruption was the worst energy shock the world had ever experienced, worse than the 1970s oil crisis and the war in Ukraine combined.
“This is a historic disruption for global oil,” S&P Global Vice Chairman Daniel Yergin said in an interview with Barron’s last month. “There has never been anything like this scale. Not even the oil crisis of the 1970s, the Iran-Iraq war of the 1980s, or even Iraq’s invasion of Kuwait in 1990 come close to the scale of this disruption.”
But David Rubin, a senior fellow at Chatham House, said prices have so far reacted more slowly and economic growth may prove more resilient than feared. He noted that the world economy is consuming less oil than in the past, and now requires about 40% of a barrel of oil per unit of GDP, compared to a full barrel in the early 1970s. Wind, solar and nuclear power are also diversifying the energy mix in ways that didn’t exist 50 years ago, Rubin noted.
If the conflict escalates further, “there is a good chance that the energy impact of this crisis could start to have as big a negative impact as the crisis of the 1970s,” he said.
China in the crosshairs
The blockade also risks drawing the world’s second-largest economy into conflict. Analysts say China remains Iran’s biggest oil buyer and has continued to accept shipments through the strait since the war began.
A total ban on tankers carrying Iranian crude oil threatens to cut off supplies and could reignite tensions between the United States and China ahead of President Trump’s planned visit to China next month. “I don’t think President Trump is ready for that escalation,” Parsi said, adding that “it wouldn’t be surprising” if Trump walked back on his earlier threats.
The Trump administration also threatened on Monday to impose additional 50% tariffs on China if it supplies advanced defense equipment to Iran.
Parsi said countries such as India and Pakistan, which are negotiating safe navigation agreements with Iran, could also be caught in the crossfire.
Negotiation tactic or miscalculation?
Some analysts see the blockade as forced leverage rather than a final escalation. “All these moves should be treated as negotiating tactics and threats, as neither side has clearly stated that talks will not resume or that the ceasefire has ended,” Parsi said.
Brian Jacobsen, chief economist at Annex Wealth Management, was cautiously optimistic, suggesting the U.S. government may create safe passage exemptions for allied ships. But Emmons warned that this strategy carries serious downside risks.
Measures aimed at bringing Iran “to its knees” could easily trigger a counterattack and a new cycle of military escalation, he said.
Iran’s Islamic Revolutionary Guard Corps issued a similar signal, warning on Sunday that any warship approaching the strait “under any pretext” would be considered a violation of the ceasefire. He also strengthened his rhetoric, saying any miscalculation would draw the enemy into a “deadly vortex.”
no legal basis
Experts say the blockade is legally debatable, as neither the United States nor Iran has the authority to block or obstruct passage through Hormuz.
“Under international law, particularly the rules governing international straits, the United States has no legal authority to close, suspend, or impede transit through Hormuz,” Emmons said. He added that Iran and Oman are the only coastal states, and even those countries are prohibited from stopping transit routes.
For shipowners, effectively deterring passage through the strait would include exposing them to Western sanctions against Iran. According to Lloyd’s List Intelligence, payments to Iran risk violating U.S. and European rules, and companies could face stiff fines.
