The Strait of Hormuz remains only partially open four months after Iran closed it in late February, leaving energy markets and businesses navigating live, unresolved risk.
The closure began after the United States and Israel launched air operations against Iran on February 28, with Iran’s Revolutionary Guard Corps Navy responding by blocking tanker traffic through the strait.
At the worst point, an estimated 14 million barrels per day of oil output was shut in, representing roughly 14 percent of global demand, while vessel traffic through the strait fell more than 90 percent.
Brent crude reached $114 per barrel on March 27, representing the largest single-month price increase in the history of oil markets, as roughly 2,000 ships sat stranded in the Persian Gulf.
On June 17, the United States and Iran signed a memorandum of understanding intended to end the conflict, with Iran agreeing to end its closure of the strait in exchange for the lifting of the U.S. naval blockade of Iranian ports.
Early signs were encouraging, with U.S. officials confirming that 16 million barrels of oil transited the strait in a single day on June 21, more than moved through it before the war began.
A single-day record of roughly 20 million barrels followed shortly after, but the recovery proved short-lived as Iran’s IRGC military command declared the strait closed again on June 20.
Iran’s foreign ministry contradicted its own military within hours, telling state media that shipping was operating normally, while U.S. Central Command reported traffic was continuing largely uninterrupted.
Commercial tracking services including MarineTraffic and Kpler have repeatedly shown transit figures that diverge from U.S. military counts, with some analysts believing vessels are switching off tracking transponders while still moving through the strait.
A cargo vessel was struck by an unidentified projectile near the Omani coast on June 25 during a transit attempt, prompting the International Maritime Organization to pause a planned evacuation of several hundred vessels stranded in the Gulf.
Brent, which the EIA’s June forecast had projected to average around $105 per barrel through the summer, instead fell to roughly $73 by early July, its lowest level in four months, as stranded tankers carrying roughly 35 million barrels exited through the strait following the ceasefire agreement.
The EIA’s June outlook projects wholesale diesel and jet fuel prices will rise more than 60 percent and 40 percent respectively in 2026 compared with its pre-conflict February forecast, with wholesale gasoline projected to rise about 50 percent against the same baseline.
U.S. crude oil and petroleum product net exports hit a record 5.8 million barrels per day in April, as buyers moved to fill the gap left by reduced Middle East shipments, with May holding close to that level.
An analysis comparing fuel shipment values during the conflict against the same period a year earlier found the United States saw export revenue rise by about $50 billion, while Russia gained more than $15 billion by redirecting exports around the bottleneck.
The EIA does not expect full normalization of strait traffic until early 2027, with Middle East producers still pumping more than 11 million barrels per day below pre-conflict levels as of May.
Iran has said it will begin charging vessels transiting the strait in mid-August, when the agreement’s 60-day toll-free period expires, while the United States has rejected any Iranian tolling arrangement outright.
Iran also warned on July 2 that vessels must follow Tehran-designated routes or face a military response, making mid-August a critical deadline for the strait’s operational status.
The United States and Iran exchanged military strikes on June 28, then held two days of indirect talks in Doha within days, with Qatar’s foreign ministry saying the discussions made positive progress on strait traffic and frozen assets without achieving a breakthrough.
Those talks are paused until funeral ceremonies in Iran conclude on July 9, and energy and legal teams should plan for prolonged uncertainty rather than a clean resolution to the crisis.