The tensions surrounding the Strait of Hormuz are nothing new. Previously, despite facing pressure from Democrats in Congress, U.S. President Donald Trump insisted on negotiating with Iran, even going so far as to send a handwritten letter. However, Iran’s stance was uncompromising, maintaining that its nuclear program was non-negotiable. Meanwhile, Israel’s position was equally clear: it advocated for a military solution. Gulf Arab states, led by Saudi Arabia, had also been pushing Trump to use military force, but the U.S. President was hesitant, largely due to concerns regarding the upcoming midterm elections. For its part, Iran continued to flex its muscles, repeatedly warning that a "rain of thousands of missiles" would descend upon Israel. Indeed, many international observers believed that if Iran chose to retaliate, it would take "only thirty minutes" to wipe Israel out.
The resulting tense standoff and the obvious risks of war were rather clear. However, although the international capital and energy sectors claimed to possess the best analytical resources and a large number of outstanding talents engaged in geopolitical and risk research, they actually made serious misjudgments of the long-term and persistent tensions in the Strait of Hormuz, leading to the current absurd situation that exists around the Strait of Hormuz.
Based on a consolidated review of available data, as of March 1–2, 2026, maritime traffic in and around the Strait of Hormuz had virtually ground to a halt. A substantial number of oil tankers, including crude oil and liquefied natural gas tankers, at least 150 by conservative estimates, had accumulated at both entrances to the strait and in adjacent waters, remaining at anchor rather than entering what is widely regarded as a high-risk zone. Most of these vessels are positioned on the Persian Gulf side and to the west of the strait’s outlet. Due to variations in statistical coverage and geographic scope, some more expansive assessments present significantly higher figures. According to these estimates, as many as 706 non-Iranian oil tankers are currently awaiting passage, including 334 crude oil carriers, 109 vessels transporting heavy refined products, and 263 carrying clean petroleum products. These more than 700 vessels of various classes are dispersed across the Persian Gulf, the Gulf of Oman, and the broader Arabian Sea surrounding the strait.
A significant number of oil tankers are also stranded within the narrow chokepoint of the Strait of Hormuz and its immediate surrounding waters. These include 67 Very Large Crude Carriers (VLCCs), 20 Suezmax tankers, and 33 Aframax tankers, bringing the total to approximately 196 vessels of various classes effectively trapped in and around the strait.
Within the shipping industry, the recent escalation of regional conflicts has prompted several major shipping companies to suspend transit through the area. As a result, many vessels have either turned back or dropped anchor to await further developments, including off the coasts of the United Arab Emirates and Oman.
From both a shipping and insurance perspective, the cancellation of war risk coverage for transits through the Strait by international shipowners and insurers has sharply increased operational risks. Many tankers are therefore opting to reroute or remain on standby until the situation becomes clearer. According to multiple insurance brokers and industry analysts, war risk insurance premiums have risen from approximately 0.25% of a vessel’s insured value to between 0.2% and 0.4%, an increase of roughly 25% to 50%. For example, for a vessel valued at USD 100 million, a single transit previously required about USD 250,000 in war risk premiums; that figure could now rise to USD 375,000 or even higher.
In practice, several major war-risk insurers, such as Gard, Skuld, and NorthStandard, have announced the outright suspension of war-risk coverage for the region, or have issued formal notices of cancellation. This has forced policies into renegotiation and driven premiums sharply higher. In effect, many shipowners are now finding it extremely difficult, if not impossible, to secure war-risk insurance coverage for transits through the area.
In the capital markets, major U.S. stock indices broadly declined at Monday’s open. Technology and banking shares weakened, and risk-sensitive assets came under selling pressure. The Dow Jones Industrial Average, the S&P 500, and the Nasdaq Composite all retreated. Meanwhile, the VIX volatility index, a key gauge of market fear, rose to a recent high, reflecting a clear hit to investor confidence. Although European governments have sought to distance themselves from the conflict, major European equity indices also fell sharply. France’s CAC 40 and Germany’s DAX 30 each posted losses of around 2%. All European countries are members of NATO. While European leaders may be reluctant to become directly involved, alliance obligations complicate that stance. Should the U.S. request access to bases or facilities, refusing outright would be politically and strategically difficult. The logic is straightforward: declining U.S. requests could carry implications for future American support in European contingencies. As a result, countries such as the United Kingdom may ultimately feel compelled to accommodate Washington’s position, underscoring how alliance dynamics increasingly involve reciprocal expectations and strategic trade-offs.
Arab states, particularly the Gulf countries, are now facing mounting pressure. Despite the fact that some of them, including Oman and Qatar, have served as mediators in Iran’s peace negotiations, Iran has not taken that role into account and has instead included them within the scope of its retaliatory posture. As a result, these countries are confronting significant air defense strain. The Dubai Financial Market and the Abu Dhabi Securities Exchange have temporarily suspended trading to guard against severe volatility stemming from escalating Middle East tensions. Dubai’s aviation hub has likewise descended into considerable disruption. In global markets, energy stocks, especially oil and gas companies, have attracted strong inflows of capital amid rising crude prices. The defense and military-industrial sectors have also rallied sharply, including major defense contractors, as international investors assess that the conflict could drive higher defense spending. At the same time, transportation disruptions have fueled a surge in oil prices, with Brent crude at one point jumping by approximately 8–10%, reflecting heightened concerns over potential supply interruptions.
In addition, gold has risen broadly, attracting substantial buying interest as a traditional safe-haven asset. The U.S. dollar has strengthened as well, reflecting a global shift toward relatively secure currency holdings. At critical moments, investors tend to set aside prior authoritative analyses, and many have concluded that the euro and the yen are less reliable in times of acute geopolitical stress.
Across the key sectors of insurance, shipping, energy, and capital markets, institutions often pride themselves on possessing the most sophisticated geopolitical research capabilities and risk-assessment talent. Yet when it comes to evaluating the risk of actual warfare, their performance has, without question, proven virtually ineffective. According to analysts at ANBOUND, the current situation around the Strait of Hormuz constitutes a form of war-related disruption rather than a development likely to produce lasting structural impact. In their view, the disturbance is likely to be relatively short-lived. That said, this phase of wartime disruption should be understood as inherently volatile, with the potential for repeated fluctuations as the conflict evolves. For example, according to European media coverage, Iranian officials have reportedly declared that they have lifted the blockade of the Strait of Hormuz. This appears to signal a willingness to negotiate. However, whether this position reflects operational reality must be judged in light of subsequent military developments; premature assumptions would carry considerable risk. Broadly speaking, the greater the intensity of U.S. and Israeli strikes on Iran, the weaker Tehran’s capacity to threaten the Strait. Should the current Iranian government collapse, the threat would likely dissipate altogether. Otherwise, this waterway, critical to global trade, may continue to haunt international markets for the foreseeable future.
Is a prolonged Iranian blockade of the Strait of Hormuz a realistic possibility? The answer is almost certainly no. Such a move would invite forceful retaliation from across the globe and could trigger a coordinated international military response against Iran. Tehran’s strategic objective has consistently been to use the Strait of Hormuz as a deterrent lever rather than to provoke its own destruction. What Iran ultimately seeks is strategic leverage and political authority—not annihilation. If it were to overplay its hand, the consequences would likely be counterproductive. Iranian strategists are undoubtedly well aware of this reality. From a war-gaming and strategic logic perspective, therefore, the probability of a sustained closure is extremely low. Over the long term, the Strait of Hormuz is likely to remain a viable and dependable shipping corridor. The sharp market volatility seen at present, when viewed through a long-term investment lens, should eventually subside and stabilize. Panic-driven reactions and assumptions of a permanent structural disruption lack a practical foundation.
Could the U.S. and Israel maintain long-term control over the Strait of Hormuz? While this possibility cannot be entirely ruled out, the current costs of the conflict are being borne by them, and in theory, any gains would also accrue to them. From a global strategic perspective, the threat should not be overstated. The U.S. geopolitical strategy today is primarily regional rather than global, with a focus on the Americas. Any attempt at global dominance would effectively overturn the positions outlined in President Trump’s National Security Strategy and return to the framework of the Democratic Party era, a scenario that is clearly unacceptable from a Trumpist standpoint. The conclusion is therefore straightforward: even if the U.S. possesses dominant influence, its actual strategic posture in the Middle East and around the Strait of Hormuz will remain cautious and predictable. This assessment is particularly important for China, as it shapes expectations for regional stability and risk management.
Final analysis conclusion:
The future of China-Iran relations does not look particularly promising. Regardless of the outcome of the current conflict, the social foundations within Iran have already been shaken, fundamentally altering the underlying dynamics. In the long term, the prospects for Iran-China relations are far from optimistic when viewed from China’s perspective. Accordingly, it is prudent for China to adopt a moderate and peaceful approach, particularly in efforts to support the demilitarization of the Strait of Hormuz. Such a strategy would be both cautious and credible, enhancing China’s influence and persuasive capacity in the region over time.
