Who Controls Hormuz: Protecting Global Trade or Creating a New American Maritime Monopoly?
Prem Sagar Poudel
The Strait of Hormuz is no longer merely a shipping route. When an oil tanker slows down there, insurers recalculate risk, Asian energy companies reassess whether their next cargo will arrive on time, and eventually the consequences can travel through India’s import bill to the price of petroleum and cooking gas in Nepal. In one of the world economy’s most sensitive maritime arteries, the confrontation is no longer only between the United States and Iran. What is being tested is the relationship between capability and legitimacy, security and control, international law and the limits of great-power authority.
US President Donald Trump has claimed that the United States exercises “complete control” over Hormuz. That assertion exposes the central contradiction of the crisis. If the US Navy clears sea mines, protects commercial vessels and ensures the free movement of international shipping, it contributes to collective maritime security. But if the same capability evolves into the power to determine whose oil may reach global markets, which vessels may pass and which economy may be pressured through restricted maritime access, the boundary between security and domination begins to disappear. The United States may possess the capability to exercise control. The more difficult question is whether the world must therefore accept that capability as legitimate authority.
Modern maritime dominance is not determined by the number of warships alone. Much of America’s real power is invisible. Satellites, drones, maritime patrol aircraft, electronic and signals intelligence, cyber systems and information supplied by regional partners provide Washington with an almost continuous picture of activity across a vast maritime space. The movement of Iranian boats, the activation of mobile missile units, changes in tanker routes and unusual communications can become part of an operational picture before actual combat begins. This maritime domain awareness is a critical pillar of modern power. Yet when surveillance capabilities employed in the name of collective security become instruments for enforcing unilateral economic pressure, the argument returns to the same fundamental issue: capability exists, but where does legitimacy come from?
A serious analysis must also acknowledge the American argument. If Iran attacks US military assets or commercial shipping, lays sea mines or uses an international waterway as an instrument of violent coercion, the question of self-defense naturally arises. Article 51 of the United Nations Charter recognizes the right of self-defense following an armed attack. But self-defense is not an unlimited authorization. It is constrained by the principles of necessity and proportionality. Removing an immediate military threat is one matter. Using that threat as the basis for controlling another country’s broader energy exports, financial transactions and long-term commercial existence is another.
The issue also extends beyond legal legitimacy to moral legitimacy. A military action may be defended under one interpretation of law, but if its economic consequences are transferred to millions of civilians who had no role in the confrontation, a separate moral question arises. Legality and morality are related, but they are not identical.
This is where a longstanding contradiction in American maritime policy becomes particularly important. The United States is one of the world’s strongest advocates of freedom of navigation, yet it has never ratified the United Nations Convention on the Law of the Sea. Washington accepts many of its provisions as customary international law, so it would be inaccurate to suggest that the United States operates entirely outside the maritime legal order. Nevertheless, there is an undeniable political contradiction when the most powerful state urging others to respect a rules-based maritime system is not formally party to its principal multilateral convention. A rules-based order remains credible only when rules are obligations for the powerful as well as the weak.
The Suez Crisis of 1956 offers a useful historical lesson. Britain and France possessed the military capability to intervene against Egypt, but military capability alone could not generate political legitimacy. Pressure from both the United States and the Soviet Union ultimately forced them to withdraw. Hormuz today is not Suez. The crucial difference is that the United States itself is now the dominant maritime power, and there is no equivalent naval force in the immediate region capable of balancing it. That imbalance makes the legitimacy of “control” even more consequential. International courts, maritime institutions and multilateral organizations may play roles, but their authority depends heavily on jurisdiction, state consent and enforceability. International law may claim universal principles, yet the ability to enforce them remains deeply unequal.
Iran understands this asymmetry and has therefore built its strategy around asymmetric warfare. Tehran cannot realistically expect to defeat the US Navy in a conventional maritime conflict. Its objective is instead to make the American presence more expensive, riskier and politically exhausting. Fast attack craft, sea mines, coastal anti-ship missiles, drones, cruise missiles and ballistic missiles serve that purpose. The narrow geography of Hormuz increases their potential effectiveness.
The United States can deploy advanced warships, aircraft, missile defenses and surveillance systems. Iran can preserve risk with comparatively inexpensive weapons. The confrontation therefore becomes not only a test of military capability but also a contest of cost tolerance and political patience. In asymmetric warfare, the weaker side does not necessarily have to win. It may only need to ensure that victory for the stronger side remains expensive, uncertain and politically uncomfortable.
Sanctions create another consequence: opacity. Shadow tanker networks associated with sanctioned energy exporters, complicated ownership structures, frequent flag changes and ship-to-ship transfers at sea provide methods for circumventing restrictions. Yet they also increase the risk of maritime accidents, oil spills and unclear liability. Economic warfare does not always eliminate trade. It can push trade outside transparent legal and regulatory structures, making it more dangerous.
The maritime insurance industry has consequently become another center of power. A waterway being legally open does not mean that shipping companies will use it. War-risk premiums, reinsurance costs, freight rates and security expenses can determine whether voyages remain commercially viable. A navy may declare a route open, but if insurers regard the risk as unacceptable, the route can become economically inaccessible. Modern maritime power therefore rests not only on warships. It also rests with institutions that determine the price of risk.
There are alternatives to Hormuz, but none can fully replace it. Saudi Arabia can move oil westward through pipelines toward Yanbu on the Red Sea. The United Arab Emirates has infrastructure allowing some exports to reach Fujairah without passing through Hormuz. These routes reduce dependence on the strait, but they cannot substitute for its entire capacity. This is why the present crisis could reshape future energy geography. Investment in alternative pipelines, ports, strategic storage, renewable energy and electrified transport is likely to grow. If Iran repeatedly uses Hormuz as an instrument of pressure, the world may eventually respond not simply by confronting Iran, but by reducing dependence on Hormuz itself. In the long run, that could diminish one of Tehran’s most valuable geopolitical assets.
It would also be misleading to treat American pressure as the unified will of a homogeneous “collective West.” Europe, Japan and South Korea are deeply connected to the US security architecture, but their economic priorities do not always coincide with Washington’s. For the United States, maximizing pressure on Iran may be a strategic objective. For Tokyo, Seoul or European capitals, uninterrupted energy supplies may be the more immediate concern. Public diplomacy may display alliance unity while private diplomacy reflects anxiety over supply security, oil prices and the risk of escalation.
The Gulf states face a similar dilemma. Saudi Arabia, the United Arab Emirates, Qatar and Oman maintain varying levels of security cooperation with the United States, but they do not seek permanent war with Iran. Their energy exports, financial centers, ports, tourism industries and economic transformation plans depend on regional stability. They want an American security umbrella, but they do not want to become the battlefield of an American-Iranian confrontation. This is not necessarily a contradiction. It is the practical diplomacy of states trying to preserve their interests between competing powers.
For China, Hormuz represents an even broader strategic question. Beijing has sought greater energy diversification, expanded overland links with Russia and Central Asia, increased some energy transactions in yuan and explored alternative financial mechanisms. Its concern is not limited to the price of Iranian oil. If one great power can use military dominance over a strategic waterway to turn commercial access into a tool of political pressure, the same precedent could eventually affect other maritime corridors.
China’s trade networks across the Indian Ocean and its broader Maritime Silk Road interests therefore make Hormuz more than an energy issue. It is also a potential model for the future rules of great-power competition.
The economic contradiction of American pressure is equally significant. When Middle Eastern supplies become less secure, the strategic value of US oil and liquefied natural gas can increase. Higher regional tension can also stimulate demand for air defenses, missile defenses, surveillance platforms and maritime security systems. American defense and energy industries may therefore derive structural benefits from prolonged insecurity.
This does not prove that the United States creates crises in order to generate commercial gains. Such a claim would require evidence that is not established merely by identifying beneficiaries. But serious strategic analysis should not ignore the economic incentives created by the interaction of military policy, energy markets and defense industries. The purpose is not to invent conspiracy. It is to identify structures of advantage.
American financial power adds another dimension. The dollar, international banking networks, insurance and secondary sanctions together give Washington extraordinary coercive capacity. Yet extensive use of these instruments also encourages China, Russia, Iran and other non-Western economies to explore trade in national currencies and alternative payment systems. The dollar is not on the verge of losing its global role. Its liquidity, institutional depth and international trust remain unmatched. But the more financial infrastructure is used as a strategic weapon, the greater the incentive for other powers to build mechanisms designed to reduce their vulnerability to it. Sanctions are a source of American power in the short term. Excessive reliance on them could eventually accelerate institutional efforts to constrain that power.
The least-heard voice in this confrontation belongs to ordinary people. When energy becomes more expensive, maritime freight costs rise. Fertilizer, agricultural production, food, medicine, transport and household energy then become more expensive as well. Wealthy economies may absorb a few percentage points of inflation as a manageable inconvenience. For poorer families in South Asia or Africa, the same increase can mean using less cooking fuel, abandoning necessary travel or cutting food consumption. Great powers test their strength at sea, but families thousands of kilometers from the battlefield can end up paying the bill. This is where the question of moral legitimacy becomes impossible to separate from the question of legal authority.
Nepal should draw a direct lesson from this crisis. Its petroleum supplies come through India, itself one of the world’s major energy importers. A shock in global oil markets eventually reaches Nepali consumers. Nepal therefore cannot continue to view hydropower primarily as an export commodity. It should also treat electricity as a national energy-security asset.
Electrification of public and private transport, expansion of electric cooking, reliable domestic power supply, adequate strategic petroleum reserves and institutionalized emergency supply coordination with India should be considered parts of a single national security framework. Selling electricity abroad earns foreign currency. Using that electricity at home to replace imported petroleum also saves foreign currency and reduces strategic vulnerability. For Nepal, this may be the most practical lesson from Hormuz.
The future of the strait could develop in three broad directions. American military superiority could progressively weaken Iran’s disruptive capabilities and restore more normal commercial traffic. Iran could avoid direct defeat while maintaining enough risk through drones, missiles and mines to keep the waterway legally open but economically expensive. The third possibility is a political accommodation that links maritime security, energy exports, sanctions and regional security within a negotiated framework.
The first option may be militarily achievable but costly. The second would remain deeply destabilizing for the world economy. The third would be difficult, but it offers the most rational long-term path.
Hormuz is not America’s private maritime gateway. Nor is it Iran’s geopolitical hostage. It is a shared artery of the world economy. No regional power should be allowed to close it. No great power should be permitted to transform it into a system of private permission.
The limitations of international maritime institutions, trade bodies and judicial mechanisms do not eliminate that principle. They instead expose the need for clearer rules and more equal enforcement.
In the twentieth century, controlling oil fields was a central form of power. Today, power increasingly lies in controlling sea lanes, currencies, banking systems, insurance, satellites, technology, ports, energy storage and supply chains. But capability and legitimacy are not the same thing.
That is the fundamental question Hormuz is putting before the world.
If today’s answer is simply the warship, tomorrow’s world map will also be drawn by warships. If the answer is international law, equal rights and shared interests, Hormuz can remain not the controlled gateway of a single power, but a common and open route for the world.
About the Author: Prem Sagar Poudel is a senior journalist and international relations analyst from Nepal. He has conducted in-depth studies on Nepal-China relations, the geopolitics of the Himalayan region, and Asian security issues.
