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Issue Brief July 31, 2026 • 10:00 am ET

The crisis in the Strait of Hormuz is a heavy blow to the deteriorating maritime order

Bottom lines up front

Unfettered freedom of navigation could be a casualty of the Iran war—along with the UN Convention on the Law of the Sea (UNCLOS), of which it is a hard-fought part.
Iran’s argument for its closure of the Strait of Hormuz is strengthened by the fact that the United States, China, and Russia have also violated or undermined the convention. Like Iran, the United States has not ratified UNCLOS.
Shipping industry experts now fear tolls or additional limits on free passage at other critical shipping lanes.

Until the US–Israeli war against Iran began on February 28, 2026, the Strait of Hormuz functioned as foreseen under the United Nations Convention on the Law of the Sea (UNCLOS). Iran responded to the attack by, in effect, blocking traffic in the strait. This has been followed by ceasefires and eruptions of renewed violence. For different periods over several months, transiting the strait has been virtually impossible for most vessels.

After the beginning of the war, Iran launched a government agency handling strait passage permits and payments. It has also floated the prospect of levies on cables in the strait. The June ceasefire signed by the United States and Iran saw the de facto introduction of separate shipping lanes in the Iranian and Omani sides of the strait, though Iran understood the ceasefire agreement to mean that it alone would oversee Hormuz transits.

Even if the United States and Iran manage to reach an enduring agreement that grants ships free passage through the strait as before the war, Iran’s use of a maritime chokepoint as a geopolitical tool—implemented in response to a war that violates the United Nations Charter—and the United States’ inconsistent response dramatically undermine the global maritime order and open the door for further such closures.

Background

UNCLOS, the massive maritime treaty that was signed by most of the world’s countries in 1982 and came into force in 1994, covers most aspects of maritime governance. Perhaps the most famous pillar of this “constitution of the ocean” is the right of innocent passage, which grants all ships freedom to navigate in all waters, including territorial waters, as long as their journey is “not prejudicial to the peace, good order or security of the coastal State.”¹ UNCLOS defines territorial waters as those up to twelve nautical miles from a costal state’s shoreline.

Crucially, ships also enjoy the right of innocent passage through straits, narrow maritime thoroughfares that, by definition, mostly encompass coastal states’ territorial waters. At its narrowest point, the Strait of Hormuz is twenty-one nautical miles wide. The Strait of Gibraltar’s narrowest point stretches more than seven and a half miles between Gibraltar and Morocco. The Strait of Malacca’s narrowest point measures a mere two nautical miles, as does the Danish Straits’ narrowest point. Because these waters are so narrow, safe and efficient ship transits are indispensable.

In Article 37, which addresses straits, UNCLOS states that “all ships and aircraft enjoy the right of transit passage, which shall not be impeded.”² This right of innocent passage through straits was a key achievement of UNCLOS. For centuries, coastal states adjoining straits took advantage of the tempting opportunity to restrict access to their straits, while some charged passage fees. Between 1429 and 1857, Denmark charged “sound dues” on ships traversing the Danish Straits. When states adjoining straits agreed to innocent passage under UNCLOS, they thus gave up significant leverage—but they did so knowing that freedom of navigation for all ships everywhere ultimately benefits all nations and aids trade.

Transit passage through straits was, in fact, a key objective for some of the world’s most powerful countries during the UNCLOS negotiations. “The navigational freedom, including transit passage through straits, was one of the two no-sign issues for the United States of America,” explained Ambassador John Morton Noore in a late May interview with the author. Moore is a professor of international law who represented the United States during the UNCLOS negotiations as well as numerous other international negotiations, and is known as a global authority on the law of the sea.³ He explained that President Reagan was concerned enough about prioritizing strait access that he re-staffed the US negotiating team and made it “very, very clear that the United States, in order to have a successful agreement, had to have strait transit passage along with the rest of the core navigational issues.” There were, Moore noted, “a number of major navigational powers that were coordinating with one another loosely in these negotiations that included the United Kingdom, France, the United States, the then Soviet Union, and Japan. Every single one of those countries had adopted a position with no slippage at all that there had to be secured access.” In the end, transit passage was included in UNCLOS.

In the Strait of Hormuz, Iran and Oman—the strait’s two coastal states—had successfully introduced a traffic separation scheme years earlier, in 1968.⁴ Even though Iran has not ratified UNCLOS, the nation has abided by the convention’s rules on freedom of navigation in Hormuz. Together with Oman, it has also overseen the traffic separation scheme (TSS) through the strait.

Jonathan Benner, another leading US maritime lawyer, noted that even though the United States and Iran never ratified UNCLOS, over the years they have engaged in detailed interaction regarding the Strait of Hormuz, specifically concerning whether non-UNCLOS participants had the right to transit passage or only to the less generous innocent passage, which governs other waters.

Benner explained in a June interview with the author: “In 1987, there was an exchange of notes between the United States and Iran regarding the impact of UNCLOS [which was to enter into force in 1994] on passage through the strait. Iran took the position that conditions of passage through Hormuz were contractual rights under UNCLOS and that non-parties to UNCLOS had no standing to complain of or claim freedom from restrictions that would be imposed by littoral states. The US responded that the right of transit passage was governed by customary practice of long standing, regardless of a country’s status as a signatory or ratifier of UNCLOS. The US in this context, and ever after, was asserting ‘transit passage’ rights. Iran’s position was that transit passage sprung from contractual rights under UNCLOS and that principles of ‘innocent passage,’ a more restrictive concept that acknowledges a potential authority of a littoral state to impose prior notice and permission requirements, would be the most the US could claim.”⁵ The dispute was never resolved, but it is an indication that both the United States and Iran have, for decades, been acutely aware of the legal issues surrounding the Strait of Hormuz.

Indeed, until the eruption of the current war, Iran granted US-flagged vessels passage through the Strait of Hormuz despite having declared, upon signing UNCLOS in 1982, that it would not do so. “They made a statement aimed at the United States specifically that if you were not a member of the convention, you would have no right of transit passage through the Strait of Hormuz,” Moore said.⁶ Until the war began on February 28, 2026, ships flagged or owned in virtually all the world’s countries traversed the Strait of Hormuz unimpeded. They did so using the TSS, a maritime traffic arrangement that features one shipping lane in each direction. This orderly arrangement allowed an average of about 130 ships to transit the strait every day.⁷

Developments in the Strait of Hormuz since February 28, 2026: Cargo

When the United States and Israel launched their war against Iran, Iran responded in a way that surprised virtually no one: by threatening shipping in the Strait of Hormuz and announcing it had mined the TSS. This caused a de facto closure of the passageway and constituted a violation of UNCLOS Article 37. However, Tehran could argue that it had not ratified UNCLOS and that it had the right to respond as it did—even if strait passage could be deemed as constituting customary international law—because Israel and the United States had violated the United Nations Charter by attacking Iran.

This was, in fact, the first time the Strait of Hormuz had been closed to maritime traffic. “I’ve been in war insurance for twenty-two years and for fifteen years before that in tanker shipping,” said Svein Ringbakken, managing director of the Oslo-based maritime war insurer DNK, in a June interview with the author.⁸ “A closure of Hormuz has always been a scenario people have talked about. And now it happened. Even though people like me have discussed it and taken the possibility seriously, and have understood that it’s a pretty close possibility in a situation where Iran is at war, both the scale of Iran’s response in the region and the fact that it was now closed to the straits were shocking.”

The de facto closure had an immediate effect. Vessels that had been approaching the strait from the Gulf of Oman halted just outside the entrance, while up to two thousand vessels that were on the other side of the strait in the Persian Gulf halted there.⁹ Unsurprisingly, insurers increased their rates but insurance remained available. Still, because of the immediate risk to their ships and crews, the vast majority of ships did not attempt the passage through the Strait of Hormuz.

The closure of Hormuz, in combination with the US failure to reopen the strait, triggered global concern and effects. There was concern for trapped seafarers—thought to number about twenty thousand—but the most immediate worry concerned the global supply of oil and gas. Gulf states primarily export their energy through the Persian Gulf and the Strait of Hormuz, the gulf’s only entrance and exit. In the week before the war, 38 percent of global oil supply travelled through the Strait of Hormuz, as did 29 percent of liquefied petroleum gas (LPG), 19 percent of liquefied natural gas (LNG), and 19 percent of petroleum products.¹⁰ When the war erupted, oil prices unsurprisingly skyrocketed. The Brent crude price, which on February 26 had been $68 per barrel, rose to $94.¹¹ On March 12, the price rose to above $100 per barrel, and it reached $118 by April 29. When ceasefires were declared and ship traffic increased, the price dropped again, only to rise once again when the ceasefires collapsed.

This has had disastrous consequences for countries around the world. Although all countries—including the United States—have been affected, the pain has been the most immediate in countries that import most of their energy from the Gulf. These nations are also some of the world’s poorest. The Seychelles, for example, imported 99 percent of its oil from the Gulf before the war; Uganda, 61.5 percent; and Tanzania, 56 percent.¹² Despite being somewhat less dependent on Gulf energy, Bangladesh was forced to impose rolling energy blackouts. The Philippines shortened government bodies’ workweeks and reduced air conditioning in public buildings.

The unavailability of other goods that depend on the Strait of Hormuz has also had painful consequences. According to the African Development Bank, the severe reduction in fertilizer exports means that “farmers in countries such as Pakistan and Bangladesh—unable to outbid wealthier nations for alternative cargoes—have been forced to plant crops in depleted soil. Also in danger are Africa’s smallholder farmers, who grow 70 percent of the food for sub-Saharan Africa.”¹³ When harvest season arrives, the fertilizer shortage will become obvious.

Shortages of other crucial commodities exported from the Gulf—such as naphtha, helium, and jet fuel—have had similarly dramatic effects that, like all the shortages caused by the Hormuz crisis, will intensify the longer the crisis lasts. This is because the crisis is not only about the ships that are stuck in the Gulf but also about the ones that cannot enter to receive new cargo.

Developments in the Strait of Hormuz since February 28, 2026: Security

Iran’s threats to ships did not remain mere threats. From the beginning of the war until the June ceasefire was signed, there were thirty-nine incidents in and around the Strait of Hormuz resulting in damage to ships, injuries to seafarers, or even death. Figures from the International Maritime Organization show at least twelve seafarers were killed in these incidents.¹⁴ Twenty-two vessels were attacked, seven have been abandoned, and two have been seized. Had ships attempted the journey through the TSS—which Iran says it has mined—the figures might have been far higher.

Many of these incidents have taken place outside the Strait of Hormuz, mostly inside the Persian Gulf, and some might have been byproducts of the war rather than targeted attacks on ships. Either way, since the June ceasefire collapsed in early July, there have been more Iranian attacks on ships in addition to more US attacks on Iran. On July 20, for example, Iran responded to US strikes by striking two oil tankers in Hormuz and US military sites in Bahrain, Kuwait and Jordan, the state news agency IRNA reported.¹⁵ On Jul 29, the Iranian Revolutionary Guard Corps Navy announced that that morning, “three violating oil tankers, which ignored our warnings and continued moving along an unsafe and illegal route, were struck and stopped.”¹⁶ “The IRGC Navy said its forces continue to maintain ‘full control’ over the Strait of Hormuz while showing the resolve of the Iranian nation,” the state-linked IRNA news agency reported.¹⁷.

With its de facto blockage of the strait during the war’s first weeks and months, however, Iran made clear that it will not allow any ships to pass the thoroughfare without permission from Iranian authorities. “In the early days, there was a small window to get out,” Ringbakken said. “After a thorough risk assessment, some ships did successfully attempt the voyage, but that window closed very quickly. Hormuz really was closed. In the industry, people have always talked about the US Navy quickly opening the strait in case of a closure, but that didn’t happen. Then came the second realization. In earlier years and decades, when oil and gas from the Gulf were essential to the American economy, the US Navy would probably have opened the strait in case of a closure. But the world realized that there was no longer a motivation within the US government to commit all the types of resources that are necessary to open the strait now that the Gulf is no longer as central to US energy needs as it used to be.”¹⁸

As the war continued, Iranian authorities allowed a small number of ships to exit the Gulf based on their national links—primarily ships owned or flagged in China, India, or Pakistan. China and India are significant importers of Iranian oil, LNG, and petroleum products. Throughout the war, there have been suggestions that these and other governments have worked with Iran to get transit permission for ships connected to their countries.

On April 8, the United States and Iran agreed to a two-week ceasefire, which was later extended but also repeatedly violated. On April 13, the United States imposed a blockade of Iran’s ports with the goal of preventing ships from calling there.¹⁹ There are disputing accounts as to whether the blockade was able to fully prevent access to the ports. After a period of granting ad hoc permits to some ships, on May 5 Iranian authorities established a shipping lane through Iran’s side of the Strait of Hormuz, which ships could use after paying a fee to Iran and receiving permission to transit.²⁰ The scheme, informally known as the Tehran “toll booth,” saw several dozen ships exit the Gulf. In early May, the United States announced Project Freedom, which was going to involve escorting merchant vessels through the strait, but the initiative was shelved almost immediately.²¹ Also in early May, Iran established the Persian Gulf Strait Authority (PGSA), a body set up to handle the administration of passage through the Strait of Hormuz—essentially the institutionalization of the Tehran toll booth. This was a clear violation of UNCLOS’s right of transit passage and a troubling signal for ships dependent on transit passage in Hormuz and elsewhere in the world.

If March and early April saw full-blown war, May was characterized by confusion and turbulence as the two sides introduced the contradictory regimes mentioned above and floated the idea of others. A fragile ceasefire was violated several times and President Donald Trump threatened to resume the war. May also saw further skirmishes and threats involving the United States and Iran.

On June 17, however, the two sides signed a memorandum of understanding (MOU), which also initiated a sixty-day ceasefire. With fourteen brief points, the MOU was hardly detailed, but it included two points concerning the Strait of Hormuz. Point 4 stated, “Immediately upon the signing of this MOU, the United States of America will begin the removal of its naval blockade and any disturbances or impediments against the Islamic Republic of Iran, and it will fully end the naval blockade within 30 days. During this period, the traffic of vessels will be in proportion to the numbers of pre-war traffic being restored by the Islamic Republic of Iran. United States of America further undertakes to remove its forces from the proximity of the Islamic Republic of Iran within 30 days after the final deal.”²²

Point 5, in turn, stated, “Upon the signing of this MOU, the Islamic Republic of Iran will make arrangements using its best efforts for the safe passage of commercial vessels with no charge for 60 days, only from the Persian Gulf to the Sea of Oman and vice versa. The traffic of commercial vessels will immediately start, and considering the need for removing the tactical and military obstacles and de-mining by the Islamic Republic of Iran will be instated within 30 days. The Islamic Republic of Iran will conduct dialog with the Sultanate of Oman to define the future administration and maritime services in the Strait of Hormuz, in discussion with other Persian Gulf littoral states in line with the applicable international law and the sovereign rights of coastal states of the Strait of Hormuz.”²³

With neither point particularly specific, compliance was bound to be muddied. What materialized were two shipping lanes: one along the Iranian coast administered by Iran and an unofficial one along the Omani coast overseen by Oman and the United States. With each shipping lane having a northbound and a southbound lane, the narrow Strait of Hormuz ended up with four narrow shipping lanes rather than the two wider, central ones that operated before the war.

By late June something resembling regular traffic had materialized, with an average of about thirty ships passing through one of the Strait of Hormuz’s four lanes each day.²⁴ That was more than the number of ships that transited during the first weeks of the conflict but less than one-quarter of pre-war numbers. Crucially, the central shipping lane was unavailable due to the risk of mines and Iran had established its de facto toll system.

In late June, it even emerged that Oman had proposed to the United States and other Western countries “a plan in which shipping companies would pay service fees to use the strait.”²⁵ Oman, in effect, proposed making its unofficial shipping lane permanent and could introduce transit fees.

The MOU’s ambiguous language , however, allowed Iran to interpret Point 5 to mean that it alone would administer the Strait of Hormuz. Point 5 stated that “the Islamic Republic of Iran will make arrangements using its best efforts for the safe passage of commercial vessels with no charge for 60 days” while saying nothing about a separate Omani–US lane.

On July 7–8, Iranian forces attacked three ships attempting to transit the Strait of Hormuz using routes not approved by Tehran. The United States responded by attacking Iran, and Trump declared the ceasefire over.²⁶ This resulted in more Iranian attacks on ships as well as on neighboring countries. The United States, for its part, carried out sustained bombardment of Iran, and Trump declared that the United States would keep Hormuz open but charge transiting ships a 20-percent protection fee.²⁷ This would be a violation of UNCLOS. In the Strait of Hormuz, transits dwindled to minuscule numbers. Whatever the outcome of the latest spate in violence, strait access—which UNCLOS negotiators worked so hard to establish—is in peril in Hormuz. Indeed, the period since the beginning of the war has seen unprecedented violations of UNCLOS’s principle of unimpeded transit passage.

Iran and other countries’ UNCLOS compliance

When it comes to UNCLOS, Iran’s position is strengthened by the fact that major countries—including China, Russia, and even the United States—have violated or undermined the convention in recent years. Russia has done so through its systematic use of the shadow fleet. China has done so by, for example, constructing artificial islands in contested waters and then ignoring the ruling by a UN tribunal on the matter. And the United States has done so by, for example, permitting US-based companies to mine in international waters.²⁸

Indeed, through its mostly successful blockage of the Strait of Hormuz, Iran could inspire other states that adjoin straits to impose their own transit regimes. “We will see backsliding in straits,” Moore said.²⁹ “I fought for strait passage for ten years in the law of sea negotiations, and navigational freedom won in the interest of every country in the world. But there’s still a variety of these strait states that would love to go the other way.” The Hormuz closure opens the door for precisely such developments. Already in April 2026, Finance Minister Purbaya Yudhi Sadewa of Indonesia floated the idea of a joint Indonesian–Malaysian–Singaporean toll booth in the Strait of Malacca.³⁰

Conclusion

Although the risk of a de facto closure of the Strait of Hormuz has existed for as long as the Persian Gulf has been a crucial part of the global economy, the current closure is the first. It has triggered precisely the kind of turbulence and wide-ranging repercussions that planners had predicted. Even if a reopening of the strait’s central route is achieved in the near future and transit becomes available without impediments, the implications of the closure would remain staggering for businesses and consumers around the world—who have endured months of extremely high fuel and other commodity prices—and, most dramatically, for developing and emerging economies where the absence of fertilizer stands to cause a much-reduced harvest later this year. Shipping lines, maritime insurers, and other companies now also need to operate with the knowledge that even if the blockage in place as of July 2026 is lifted, Hormuz can easily be closed again at any moment.

Beyond the enormous effects of the closure itself, the situation in Hormuz undermines UNCLOS, especially its groundbreaking right of transit passage. It is no surprise that the idea of a Strait of Malacca toll booth has already been floated. In addition, the Hormuz crisis shows that shipping can be weaponized for geopolitical purposes. “The seas have become an arena for geopolitical conflict, and the maritime industry has become a clear target,” Ringbakken noted.³¹ “The maritime industry has been exposed to geopolitics in the past, but nothing like this.” Indeed, through some of its own actions the United States—the de facto guardian of the global maritime order—has forfeited some of the moral platform through which it could attempt to uphold this order. That creates a dual peril for the global maritime order: increasing rule violations in combination with the increasing absence of a rule enforcer.

About the Author

Fellow

Elisabeth Braw

Senior Fellow

Scowcroft Center for Strategy and Security Transatlantic Security Initiative

NATO Resilience & Society

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Image: The guided-missile destroyer USS Stout (DDG 55) travels alongside the amphibious assault ship USS Bataan (LHD 5) during a transit through the Strait of Hormuz, May 31, 2020. (Cpl. Gary Jayne III, Public domain, via Wikimedia Commons)

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