Iran Clarifies Only 'Hostile' Ships Blocked from Strait of Hormuz

On March 22, 2026, Iran's Ministry of Foreign Affairs sent a diplomatic note to the 15-member UN Security Council and Secretary-General António Guterres with a message that stopped short of a full blockade but redrew the rules of global maritime commerce: "non-hostile vessels" may transit the Strait of Hormuz, provided they "neither participate in nor support acts of aggression against Iran" and "fully comply with the declared safety and security regulations" [1]. Vessels, equipment, and assets belonging to the United States or Israel, "as well as other participants in the aggression," the note stated, "do not qualify for innocent or non-hostile passage" [1].

The communication came nearly four weeks into a US-Israeli military campaign against Iran that has reshaped the Middle East security landscape and thrown global energy markets into crisis. What Iran has framed as a legitimate wartime security measure, critics call an illegal chokepoint squeeze on the world's most consequential waterway.

What Triggered the Crisis

The immediate cause is the war itself. On February 28, 2026, the United States and Israel launched coordinated strikes against Iran targeting its nuclear and ballistic missile programs [2]. Nearly 900 strikes were carried out in the first 12 hours. Iran's Supreme Leader Ali Khamenei was killed on the first day of the campaign, with Iranian state media confirming his death on March 1 [2].

The attack followed years of escalating tensions: the collapse of the 2015 JCPOA nuclear deal, Iran's weakened position after the 12-day war with Israel in June 2025, diminished Iranian proxy networks following the Israel-Hamas war, and failed nuclear negotiations in February 2026 [2]. The United States and Israel calculated that Iran's weakened state presented an opportunity to achieve objectives that diplomacy had not delivered [2].

Iran responded with force. By March 5, a military source told Fars News Agency that Iran had fired over 500 ballistic and naval missiles and nearly 2,000 drones since the war began [2]. On March 2, the IRGC officially confirmed it had closed the Strait of Hormuz and threatened any ship attempting passage [3]. By March 4, the IRGC claimed "complete control" of the strait, with at least eight vessels having been damaged [4].

The Stakes: 20 Million Barrels a Day

The Strait of Hormuz, at its narrowest point just 21 miles wide with two one-mile-wide shipping lanes, carries approximately 20.9 million barrels per day of oil—roughly 15 million barrels of crude oil and condensate, plus 5.5 million barrels of refined products [5]. That represents about 20% of total global petroleum consumption and 25–27% of all seaborne oil trade [5].

Beyond oil, Qatar—the world's second-largest LNG exporter—shipped over 112 billion cubic meters of liquefied natural gas through the strait in 2025, representing approximately 20% of global LNG trade [5]. The countries most immediately affected by any disruption include Japan, South Korea, India, and China, which together import the majority of Persian Gulf crude [6].

Source: Federal Reserve Bank of Dallas

Data as of Mar 20, 2026CSV

The Federal Reserve Bank of Dallas estimated that a full Strait closure removes roughly 20% of global oil supply from the market—three to five times larger than previous geopolitical oil shocks including the 1973 Arab oil embargo, the 1979 Iranian Revolution, or the 1990 Iraqi invasion of Kuwait, each of which removed only 4–6% of supply [7]. Their modeling projects that a single-quarter closure would reduce global real GDP growth by 2.9 percentage points annualized, with WTI crude reaching $98 per barrel. Extended closures of two to three quarters could push oil to $115–$132 per barrel [7].

How Iran Defines 'Hostile'

Iran's UN note does not provide a detailed legal framework for what makes a vessel "hostile." The operative criteria, based on Iran's statements and actions to date, appear to include flag state, ownership, cargo destination, and diplomatic alignment with the US-Israeli military campaign [1].

In practice, Iran has granted passage selectively. A Pakistani-flagged Aframax tanker called Karachi sailed through in mid-March. Two Indian-flagged tankers carrying liquefied petroleum gas were allowed through. One Turkish-owned vessel received permission after calling at an Iranian port. China was reportedly in negotiations for safe passage of crude oil and LNG carriers [8]. France and Italy had also requested talks with Iran about passage for their vessels [8].

Iranian Foreign Minister Abbas Araghchi stated that Tehran had been "approached by a number of countries" but that the decision was ultimately "up to our military to decide" [8]. This framing places passage authority with the IRGC rather than diplomatic or civilian channels, raising concerns among maritime law experts about the absence of transparent, predictable criteria.

IRGC Enforcement Capabilities

The IRGC Navy, distinct from Iran's regular navy, has long maintained a substantial asymmetric warfare presence in the Persian Gulf and the Strait of Hormuz. Its capabilities include fast attack craft, naval mines, anti-ship cruise missiles positioned along Iran's southern coast, and helicopter-borne boarding teams [9].

Iran's enforcement track record in recent years shows an escalating pattern:

• April 2024: IRGC commandos rappelled from a helicopter onto the MSC Aries, a Portuguese-flagged container ship linked to an Israeli billionaire, seizing it shortly after Israel bombed Iran's consulate in Damascus [9].
• November 2025: IRGC forces boarded the M/V Talara by helicopter and diverted the tanker to Iranian territorial waters [10].
• December 2025: Iranian authorities detained 16 foreign crew members from a seized vessel carrying approximately 4 million liters of fuel [10].
• June 2025: US intelligence detected that Iranian military forces had loaded naval mines onto vessels in the Persian Gulf, interpreted as a preliminary step toward blockade capability, though the mines were not deployed at that time [11].

The US Maritime Administration (MARAD) issued advisories in both 2025 and 2026 warning of "Iranian illegal boarding, detention, and seizure" in the Strait of Hormuz and Gulf of Oman [10].

The Legal Question: Transit Passage Under UNCLOS

Under Article 38 of the United Nations Convention on the Law of the Sea (UNCLOS), transit passage through international straits "shall not be impeded," and coastal states bordering such straits cannot suspend transit passage "for any purpose" [12]. Transit passage applies regardless of a vessel's flag state, ownership, or cargo—a broader right than the "innocent passage" regime that applies in territorial waters [12].

Iran's legal position is complicated. Tehran signed UNCLOS in 1982 but has never ratified it. When signing, Iran declared it would apply the transit passage regime only to states that had ratified the convention, and would apply the more restrictive 1958 Geneva Convention provisions—which allow for "innocent passage" that can be suspended—to non-ratifying states like the United States [13].

The American Society of International Law noted in its analysis that Iran's position creates a legal gray area: Iran claims sovereign authority over the strait's waters while the international community treats Hormuz as an international strait subject to non-suspendable transit passage [14]. Most international legal scholars hold that the transit passage regime reflects customary international law binding on all states, regardless of whether they have ratified UNCLOS [13].

Human Rights Watch went further, calling Iran's deliberate attacks on civilian ships in the strait "apparent war crimes" in a March 24 statement, arguing that even in wartime, targeting civilian commercial vessels violates international humanitarian law [15].

Market Consequences

The economic fallout has been immediate and severe.

Oil prices: WTI crude oil, which traded around $67 per barrel in late February before the conflict began, surged past $90 by early March and hit $98.48 on March 13. As of March 16, WTI stood at $93.39—a roughly 40% increase in less than three weeks [16].

Source: FRED / U.S. Energy Information Administration

Data as of Mar 16, 2026CSV

Shipping insurance: Before the crisis, war-risk insurance premiums for vessels transiting the Gulf ran between 0.02% and 0.05% of a vessel's insured value. Since hostilities began, premiums have jumped to 0.5% to 1%, and in later stages of the conflict, to approximately 5% of vessel value [17]. For an oil tanker worth $100 million, that translates to a $5 million insurance cost per transit, compared to roughly $20,000–$50,000 before the war [17].

Leading maritime insurers—Norway's Gard and Skuld, Britain's NorthStandard, and the London P&I Club—canceled war-risk coverage for ships in the region entirely [17]. Policies that remain in effect carry 72-hour cancellation clauses at the insurer's discretion [17]. Chubb has reportedly emerged as the main US insurer still writing Persian Gulf shipping coverage [18].

Charter rates: Oil supertanker rates soared as the available fleet willing to transit the strait shrank dramatically [19].

Alternatives and Their Limits

Two major pipeline systems can partially bypass the strait. The UAE's Abu Dhabi Crude Oil Pipeline (ADCOP) runs 248 miles from Habshan to the port of Fujairah on the Gulf of Oman, with a capacity of approximately 1.8 million barrels per day, of which about 700,000 barrels per day of spare capacity exists above current UAE domestic exports [20]. Saudi Arabia's East-West pipeline offers additional bypass capacity.

Together, these systems could reroute an estimated 3.5 to 5.5 million barrels per day—but the strait normally handles 17–20 million barrels per day, leaving more than 10 million barrels per day of supply exposed [20]. As Engineering News-Record reported, "Hormuz bypass infrastructure was sized for a short disruption. This is not that" [21].

The Cape of Good Hope routing alternative, tested during the 2024 Red Sea crisis caused by Houthi attacks, adds 10–14 days to transit times. During that crisis, container shipping rates roughly doubled [22]. But the Cape route does not address the fundamental problem: oil physically cannot leave the Persian Gulf without passing through the strait or the limited pipeline bypasses.

The Military Response

President Trump signaled that the US would provide military escorts and war insurance to oil tankers transiting the strait [23]. The Pentagon explored options under the working name "Operation Epic Escort" [24]. As of late March, however, the US Navy had not yet escorted any tankers through the waterway [24].

On March 19, seven US allies—the United Kingdom, France, Germany, Italy, the Netherlands, Japan, and Canada—issued a joint statement pledging "to contribute to appropriate efforts to ensure safe passage through the Strait," without specifying what those efforts would entail [25]. France, Germany, Italy, and Japan had all previously ruled out sending naval vessels during the war [23].

Trump's response to the lukewarm allied support was characteristically blunt. "WE DO NOT NEED THE HELP OF ANYONE!" he wrote on Truth Social after most NATO members indicated they did not want to get involved [23].

The escalation risks of a naval escort mission are substantial. Defense analysts have warned that the narrow strait creates an "asymmetric trap" for conventional naval forces, where Iran's shore-based anti-ship missiles, mines, and fast attack craft hold significant tactical advantages against larger warships operating in confined waters [26].

Historical Pattern

Iran has threatened the strait before, but never followed through to this degree. In 2008, IRGC patrol boats aggressively approached US warships in the strait, though no shots were fired [11]. In late 2011, Vice President Mohammad-Reza Rahimi threatened closure in response to proposed EU sanctions, but Iran backed down after the US, France, and Britain sent aircraft carriers through [11]. In 2018–2019, after the US withdrew from the JCPOA and reimposed sanctions, Iranian officials suggested that if their oil couldn't reach markets, no one's would—and Iran mined four ships off the UAE coast and attacked two others [11].

Each previous episode ended without sustained disruption. The 2026 crisis is different because it is occurring in the context of an active military conflict, not diplomatic brinkmanship. Iran's framing has shifted from threat to fait accompli.

The Diplomatic Gap

Iran's stated justification—preventing the exploitation of the strait "to advance hostile operations"—carries an internal logic from Tehran's perspective: a country under military attack arguing it should not facilitate the logistics of its attackers [1]. Several countries, including Pakistan, India, and Turkey, appear to have accepted this framing by requesting and receiving passage permissions [8].

But the selective passage regime creates its own problems. Requiring vessels to "coordinate with the competent Iranian authorities" [1] effectively converts a right of transit passage into a privilege granted at Iran's discretion, setting a precedent that other states bordering international straits could invoke in future conflicts. The Chatham House think tank noted in a March analysis that the conflict's effects were already "spilling into the Indian Ocean" as shipping patterns adjusted globally [27].

The question of alternative diplomatic frameworks to address Iran's security concerns without disrupting global energy flows has not gained traction—in large part because the parties are at war. Previous mechanisms, including the JCPOA and regional security dialogues, collapsed before the conflict began. Trump said on March 23 that the US was "in talks with Iran" to end the war, a claim Iran denied [28].

What Comes Next

The Dallas Fed's analysis offers a quantitative framework: reducing the supply shortfall from 20% to 10% through alternative routes and selective passage would lessen the quarterly GDP impact from -2.9 to -1.6 percentage points [7]. Iran's selective approach—allowing some countries' vessels through—may be partially achieving this effect, though the data is too early to confirm.

The longer the selective blockade continues, the more the costs compound. The Dallas Fed projects that a three-quarter closure would reduce year-end global GDP growth by 1.3 percentage points and push oil prices toward $132 per barrel [7]. Even partial disruption extends far beyond oil: petrochemical feedstocks, fertilizer precursors, and LNG supply chains all run through the strait.

For now, the strait remains a selective bottleneck—open to some, closed to others, and governed by criteria that Iran's military defines on a case-by-case basis. The world's most important energy chokepoint has become, in effect, a tool of wartime leverage, with consequences that extend far beyond the Persian Gulf.