Iran's Hormuz leverage is eroding as oil reroutes around the strait — but the threat isn't gone

On February 28, 2026, the day the US-Israeli war on Iran began, Tehran effectively shut the Strait of Hormuz, cutting traffic through the world's most critical oil chokepoint to as few as two tankers a day. Seven months later, roughly 9.9 million barrels of crude are crossing the strait daily again — but the route oil takes to get there, and the cost of moving it, have been transformed in ways that are beginning to erode one of Tehran's most powerful strategic cards.

Commodity analytics firm Kpler put Middle East crude exports at an estimated 16.328 million barrels per day (bpd) in September — the highest level since the war began — recovering to just under 80 percent of the pre-war level of 19.513 million bpd exported in February. But the headline figure obscures a more complicated reality: the region's entire oil export system has been rebuilt around the disruption.

Prior to the war, 83 percent of the region's crude oil moved through the Strait of Hormuz. In September, 40 percent bypassed it entirely, moving instead through pipelines and alternative routes via Saudi Arabia and the United Arab Emirates, according to Kpler data reported by irantimes.com. Of the crude that did cross the strait in August, more than 70 percent was transferred between tankers offshore in the Gulf of Oman — vessels ferrying oil to larger tankers waiting outside the Gulf rather than sailing directly to destination ports.

This is not a return to normal. These are significant risks and come with high costs.— Ellen R. Wald, author and energy markets analyst

A vivid example of the new system came from Iraq, according to JCFA reporting: two million barrels of oil were transferred to a supertanker outside the strait, allowing delivery and pricing outside the risk zone, and Iraq plans to purchase additional tankers to expand the model. Saudi Arabia drove much of September's overall rebound, with its exports jumping from 2.446 million bpd in August to roughly 5.4 million bpd in September, according to Kpler figures cited by Al Jazeera.

Iran's own seaborne oil exports have been severely reduced under a US naval blockade. Tehran never formally controlled the Strait of Hormuz — its leverage has always rested on its ability to make the passage dangerous enough to force shipping companies to weigh the risks of entering the Gulf. US forces providing protection for commercial shipping, combined with producers finding ways to move oil with reduced exposure to the strait, appear to have diminished that capacity.

Iran's ability and/or will to attack ships in the Gulf is declining.— Ellen R. Wald, author and energy markets analyst

Iran rejects that assessment. Speaking on Wednesday, Islamic Revolutionary Guard Corps spokesperson Hossein Mohebbi described an active "military conflict" in the Hormuz Strait. "We have been hitting small ships and preventing them from passing for a long time, but America does not respond," Mohebbi told the semi-official Fars news agency, according to Al Jazeera. That same day, the United Kingdom Maritime Trade Operations centre said unknown projectiles had struck three vessels in the waterway the previous Tuesday, among them a crude oil tanker.

George Washington University lecturer Mohammad Ghaedi told RFE/RL's Radio Farda that Iranian authorities already regard the current volume of strait traffic as "unacceptable." At the same time, he warned that coverage framing Iran as having lost control of Hormuz could itself invite an escalatory reaction, and he expressed doubt that Iran would move against regional energy infrastructure despite suggestions from Tehran that it might.

Oil markets reflect the ambiguity. Dropping 2.6 percent to $102.59 a barrel on Tuesday, Brent crude responded to signs of recovering Middle East exports, according to Al Jazeera, yet the contract was still on course for a gain of around 13 percent in September. Analysts say a 'war premium' remains embedded in prices because of elevated insurance costs, dependence on US military protection, and the continued threat to vessels.

The fact that oil is getting through the Strait of Hormuz is encouraging, but flows are not yet regarded as completely secure or guaranteed, particularly while the wider conflict remains unresolved.— Susannah Streeter, chief investment strategist at Wealth Club

Streeter also pointed to a downstream vulnerability: countries including the US have drawn heavily on strategic oil reserves to cushion the disruption, and "with those stockpiles now significantly depleted, there is a thinner buffer if there is another disruption, which is helping to keep a floor under crude prices." Even as crude exports recover, supplies of refined fuels — diesel and petrol in particular — remain tight, and European Union data released on October 1 showed diesel pump prices at record levels.

The strategic logic of Iran's position is also coming under scrutiny within Iranian discourse itself. Writing associated with the Iranian establishment has begun to characterize the strait as neither fully open nor fully closed, and a difficult conclusion is surfacing alongside recognition of Iranian power: a blockade drawn out too long risks speeding the build-out of alternative routes and conditioning the market to function without Hormuz, according to JCFA. Tehran's coercive hold on the waterway weakens with every barrel that reaches its destination unimpeded — yet the extraordinary measures needed to keep that oil moving are themselves evidence that the strait has not lost its strategic weight.

As Iran and the United States work with mediators to end the hostilities, the shifting reality in the strait is shaping the negotiating landscape. According to JCFA, Algeria has put forward an offer to mediate the crisis, though no mandate or framework has been established and it remains unclear whether Tehran or Washington has accepted. Within Iran, a concept built around small, reciprocal, time-limited steps — a halt to fighting and a relaxation of the blockade in return for reopening Hormuz and restarting nuclear talks — is attracting growing attention in economic and political circles, even though it has not been put forward as an official government position. Iran's GDP contracted 10.1 percent year on year, according to official data from the Statistical Center of Iran, intensifying the domestic pressure on Tehran to reach an agreement.

The Trump administration has said it presented Iran with an 'easy' path and a 'hard' path, without disclosing what either entailed, according to JCFA. President Trump also faces a midterm election in which elevated US energy prices could prove politically costly, according to Al Jazeera.

Why it matters — The Strait of Hormuz carries a fifth of the world's oil, and the gradual erosion of Iran's ability to close it — and the costly workarounds keeping energy flowing — are shaping both global energy prices and the terms on which any diplomatic end to the conflict might be reached.

Sources differ on Whether Iran retains meaningful control over the Strait of Hormuz: Iran's ability to disrupt the waterway has been significantly degraded; its leverage is fading. (irantimes.com) vs IRGC spokesperson says there is an ongoing 'military conflict' in Hormuz and Iran has been 'hitting small ships and preventing them from passing.' (aljazeera.com)

Reported by aljazeera.com, nytimes.com, responsiblestatecraft.org, irantimes.com, jcfa.org