MW Iran is testing a 'selective' Strait of Hormuz strategy that could deliver another shock to oil markets
By Myra P. Saefong
The duration of the oil shock remains 'unknowable with any precision,' says Stephen Innes of SPI Asset Management
Iran now appears to be pursuing a "calibrated strategy" in the Strait of Hormuz, says Matt Smith of Kpler, by picking and choosing the vessels it allows to pass through.
Iran appears to be adopting a new "calibrated strategy" regarding the crucial Strait of Hormuz, by allowing only certain vessels to pass through the crucial waterway.
Yet global oil markets may be underestimating the risks of further supply shortages associated with this new strategy, according to analysts.
Iranian crude tankers continue to pass through the maritime chokepoint - vital to about a third of the world's seaborne crude oil - along with a few others that Iran has let pass through, said Matt Smith, U.S. head analyst at Kpler.
In a post on X Tuesday, MarineTraffic, which is operated by Kpler, said Iran appears to now be pursuing a strategy in the strait where it allows "selective vessel passage" to provide "strategic signaling," rather than imposing a full disruption of global crude supply through the waterway.
The post included an animated map of sparse maritime traffic traveling through the waterway. Nine vessels have crossed since Monday, according to MarineTraffic data released early Tuesday.
Several news reports indicate Iran has begun charging vessels up to $2 million to pass through the strait. Smith said Kpler could not confirm reports of such tolls.
On Tuesday, HormuzTracker, which provides a Strait of Hormuz shipping-disruption dashboard, showed that there are around 2,500 vessels still trapped inside the Persian Gulf, with 400 waiting outside of the strait.
As the Iran conflict drags on, the biggest surprise at this point is that the Strait of Hormuz is still basically closed, said Smith. The world, meanwhile, "still appears to be underestimating the impending supply shortages and higher fuel prices" that will cause.
Currently, nearly 16 million barrels of oil per day are "effectively sidelined" from the global market with passage through the strait largely frozen, according to a note from strategists at J.P. Morgan. They estimated that shortfall at 10 million barrels per day by April.
Average U.S. prices for regular gasoline at the pump rose nearly 7% over the past week through Monday, according to data from GasBuddy. American drivers saw a glimmer of hope for at least a brief reprieve from rising fuel costs when crude-oil prices fell by more than 10% Monday.
On Tuesday, however, oil prices recouped much of those losses following reports that the Pentagon plans to deploy an airborne Army unit to the Middle East. White House spokeswoman Anna Kelly told MarketWatch that all announcements regarding troop deployments will come from the Department of War, referring to the unofficial name that the Pentagon has revived for the Defense Department.
On Tuesday, U.S. benchmark West Texas Intermediate crude for May delivery (CLK26) (CL.1) climbed 4.8% to settle at at $92.35 a barrel on the New York Mercantile Exchange. Oil futures eased in extended trade Tuesday, however, after Israeli news reports indicated that plans for a 30-day cease-fire to the conflict were in the works.
The war involving Iran and the Strait of Hormuz "does not come with a tidy historical template," said Stephen Innes, managing partner at SPI Asset Management, in Tuesday commentary. "There is no clean analog for a disruption of this size moving through such a strategically vital artery, with multiple state actors, military uncertainty and global energy infrastructure all tied into the same risk knot."
'There is no clean analog for a disruption of this size moving through such a strategically vital artery, with multiple state actors, military uncertainty and global energy infrastructure all tied into the same risk knot.'Stephen Innes, SPI Asset Management
The biggest variable, he added, isn't the barrels themselves. "It is the clock," he said, and the duration of the oil shock currently remains "unknowable with any precision."
The market can estimate what oil can be rerouted, what can replaced and what cannot, Innes noted. It also can measure the limits of releases from strategic petroleum reserves, spare production capacity, freight constraints and refinery substitution, he said.
That may help to lower the global oil market's supply shortfall from the 16 million barrels it stands at today to 10 million barrels per day in April, said Innes, citing the below bar chart from the recent note from J.P. Morgan.
In that sense, "policymakers may be able to cushion the blow, but they cannot repeal physical bottlenecks," he said. So while the timeline of the conflict is uncertain, "the arithmetic is not" and "barrel math sets the price."
As of Tuesday, WTI oil prices have climbed nearly 38% month to date, while global benchmark Brent crude (BRNK26) has gained 44% over the same span.
-Myra P. Saefong
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March 24, 2026 17:36 ET (21:36 GMT)
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