‘Strait’ crude story is not straight

For two weeks or so, headlines claimed that the Strait of Hormuz, which earlier accounted for a fifth to a third of global crude oil supplies, was effectively closed by Iran. In the past few days, there was news of a few ships crossing it to reach India, Pakistan, and a few Asian destinations. However, new data according to Lloyd’s List Intelligence claims that 89 ships, which included 16 oil tankers, crossed the Strait between March 1 and 15, 2026. A fifth of them belonged to Iran, bulk of them claimed to be Chinese, either genuinely or as masquerades, and a few that reached other ports. There were some that were affiliated to Greece. Among them were two ships, Shivalik and Nanda Devi, which came to India, and carried more than 90,000 tonnes of much-needed liquefied petroleum gas (LPG), whose shortages have rocked Indian consumers. Hence, the Strait of Hormuz narrative related to crude oil shipments is crooked and twisted rather than straight.

In effect, Iran’s smuggling of crude oil exports, which have continued for years after the western sanctions were imposed before the ongoing war, ships owned by the so-called friendly nations, vessels that moved because of diplomatic efforts, and some that served Iran’s interests account for the movements. According to Lloyd’s List, “Many of the vessels that passed through the Strait were so-called ‘dark’ transits evading western government sanctions and oversight that have likely ties with Iran.” In essence, Iran’s smuggling initiatives that enabled it to sell oil in the pre-war period to willing buyers like China continued. According to an analytics platform, Kpler, “Iran has still managed to export well above 16 million barrels of oil since the beginning of March (2026).” Thus, the nation has preserved a part of its revenues, which are crucial to support the war, and manage the war-ravaged society. A global consulting firm, Reddal, claims, “Iran has managed to profit from oil sales, and also ‘preserve its own export artery’ by using control over the chokepoint (Strait of Hormuz).” Thus, Iran achieved a twin victory, as it allowed its vessels to sail, and stop others with attack threats.

Most of Iran's oil during the war, as was the case before the war, is destined for China, which is, and was, the largest buyer of the smuggled shipments. Since the latter did not believe in the western sanctions, it purchased huge quantities of Russian and Iranian oil, especially through the ‘dark’ transits, or ships that changed their ownerships several times during the sea journeys. The same strategy applies today. Indeed, according to many analysts, other vessels, and nations, gained from the strong Iran-China links. “Some vessels near or in the Strait were found to have declared themselves as China-linked or with all-China crew to reduce risks of being attacked,” say some reports, and took advantage of “China’s closer ties with Iran.” Thus, an ongoing ‘energy’ collusion between the two nations has helped both, as well as others, which Iran feels are friendly or not enemies. The ‘friendship’ vessels include several Asian and Middle East nations.

For example, according to reports, Iraq is in talks with Iran to allow the former’s ships to cross the Strait safely. This seems surprising, and counterintuitive since the two nations have fought several wars with each other in the past. However, in diplomacy and geopolitics, there are no permanent friends or enemies, and diplomacy is the art of the possible. Hence, some Iraq-owned ships may have been given a reprieve. Llyod’s List claimed that a Pakistan oil tanker, which is controlled by the Pakistan National Shipping Corporation, passed through the Strait a few days ago. But the route of the ship was neither denied nor confirmed by Pakistan official sources. A spokesman of Pakistan Port Trust admitted that the tanker would reach Karachi soon. The two Indian ships safely crossed the Strait around the same time, and carried the much-needed LPG. India’s external affairs minister, S Jaishankar, told a foreign newspaper that this was because of successful diplomatic talks with Iran. Some reports suggest that the two vessels were not in the Strait, or on the non-Asia side, but on the side nearer to the Indian coast. Hence, it was easier for them to sail.

America has added another twist to the narrative. Instead of accepting Lloyd’s List story that most of the Iranian ships opted for ‘dark’ transits, the US maintained that it had ‘deliberately’ and ‘consciously’ allowed the Iranian ships to pass through the Strait. In a TV interview, Scott Bessent, US treasury secretary, said, “The Iranian ships have been getting out already, and we have let that happen to supply to the rest of the world.” It was a humane gesture to help the Asian nations that were suffering due to high prices and shortages. Given this thought process, the story about American attacks has changed. President Donald Trump claimed that the Kharg Island, which is the key for Iran’s oil network, infrastructure, and exports, was destroyed, and he would possibly bomb it more “just for fun.” Now, it seems that only the military sites in Kharg Island were destroyed, and most of the oil structures are intact, and were left alone. Hence, America is intent on safeguarding Iran’s oil network to help the rest of the world.

Whether one accepts America’s viewpoint, or goes with the Iran-China-Friends theory, the fact remains that the Strait of Hormuz is selectively operational, and not completely shut. Indeed, it never was since the beginning of the war on February 28, 2026. Through the first fifteen days of March, shipments continued to cross it, albeit the numbers were drastically reduced from an average of 100-135 vessels a day to 89 over 15 days. As one of the analysts explains, “It (the situation) is better understood as closed selectively against some traffic (western nations), while still functioning for Iranian exports, and a narrow set of tolerated non-Iranian movements.” However, Iran’s strategy related to the Strait is quite clear. The idea is to inflict maximum pain on the western nations, especially America, drive the fear of God among the Middle East nations through attacks on military and civilian positions, and help a few large consumers, which proved to be friends in the past. In the process, Iran hopes to drive the global crude oil prices nearer to $200 per barrel. At present, though, oil prices, despite jerking to $120 from $80 or so within a day or two, seem settled around $100.