Oil markets are behaving as if the region’s supply problems will soon resolve themselves. That confidence is becoming increasingly difficult to justify.By mid-September 2026, futures prices had repeatedly eased or paused on the basis of limited diplomatic signals, even as three major vulnerabilities were developing at the same time: Iran’s effective control over the Strait of Hormuz, the Houthis’ growing grip on the Bab al-Mandab, and the shutdown of Saudi Arabia’s East–West pipeline after attacks.

The problem is not simply that individual routes are under pressure. It is that the region is losing reliable alternatives. A pipeline may bypass Hormuz, but it provides little protection if it can also be attacked. A shipping route may remain technically open, but it is of limited value if insurers, crews, and operators consider it too dangerous to use.

The problem is not simply that individual routes are under pressure. It is that the region is losing reliable alternatives. A pipeline may bypass Hormuz, but it provides little protection if it can also be attacked. A shipping route may remain technically open, but it is of limited value if insurers, crews, and operators consider it too dangerous to use.

Futures markets can respond instantly to a headline about possible talks. They cannot reopen a pipeline, restore safe passage, reduce war-risk premiums, or rebuild confidence among shipping companies. Yet prices continue to treat these risks as temporary.

Hormuz Is No Longer a Dependable Commercial Route

The Strait of Hormuz remains the world’s most important oil transit artery. In recent pre-conflict periods, it carried roughly one-fifth of global petroleum liquids, or around 20–21 million barrels per day. Since major hostilities between the United States and Iran began earlier in 2026, Tehran has exercised effective control over the conditions of passage through the strait. That control has included passage permits, restricted zones, attacks on vessels considered non-compliant, and the expansion of areas designated as unsafe.

Traffic has fallen dramatically from the previous level of approximately 125 large commercial vessels per day. Recent figures have shown single-digit daily transits, with as few as seven vessels passing on some days. Crude flows have at times fallen to the low single-digit millions of barrels per day, far below normal levels.

This is more than a temporary disruption to shipping. It has damaged confidence in Hormuz as a dependable commercial route. Tit-for-tat attacks between U.S. and Iranian forces, including attacks on tankers, have repeatedly disrupted attempts to restore normal traffic.Iran’s Islamic Revolutionary Guard Corps has expanded no-go zones and threatened broader economic retaliation. At the same time, U.S. efforts to facilitate alternative routes or reduce Tehran’s control have proved incomplete and costly.

The longer this........

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