Strait of Iran

Five months after it launched its war against Iran, the United States isn’t anywhere near subduing the Persian state. Worse, Iran is fully emboldened to assert sovereignty over the Strait of Hormuz as had effectively blocked the waterway from international shipping. Before the war, Hormuz was where a fifth of the world’s oil and liquefied natural gas supplies transited and was recognised as an international route open to free global traffic. Now, Iran is seeking to toll the strait and has been attacking any vessel passing through without its clearance. And the US hasn’t been able to do much to remedy things. 

Washington and Tehran traded claims at the weekend on the status of Hormuz and its availability to international shipping. President Donald Trump plied his repeated narrative that the US had full control of the waterway. In a Truth Social post, he said “the U.S.A. has total control over the Strait of Hormuz. I THINK WE WILL KEEP IT!” His comment reinforced his earlier assertion that American forces had “100% control” of the critical passageway for international shipping.

Iranian authorities scoffed at the American leader’s claim, which they deemed as sheer bluster. An agency known as the Persian Gulf Strait Authority said in a post on X that “claims and repeated posts by US officials that the Strait of Hormuz is no longer blocked do not change the reality: the Strait of Hormuz remains blocked and will not be reopened until Iran’s conditions are accepted.” Iranian Foreign Minister Seyed Abbas Araghchi said in another post on X that the US had “long miscalculated due to intelligence failures.” He added: “Case in point: The war on Iran. Now, an even bigger miscalculation on the Strait of Hormuz.” 

Other Iranian power centres weighed in. Recently appointed head of one of the country’s paramilitary outfits, Hossein Taeb, said Washington sought to disrupt what he described as the Islamic Republic’s popularity in the region by launching the war in the Strait of Hormuz, but had again been defeated despite claiming Iran had neither an air force nor ⁠a navy. “Today you see that the Strait of Hormuz is under the management and control of the Islamic Republic,” he said. Iran’s joint military command headquarters said no vessel could transit ⁠the Strait of Hormuz without Tehran’s permission. “The baseless claims made by the United States regarding normal passage of vessels through the Strait of Hormuz are nothing more than lies and falsehoods,” it added in a statement shared late last week on state media.

Following the outbreak of war on 28th February with strikes by the US on Iran, in concert with Israel, Tehran shuttered the waterway that runs along its coast. As part of efforts to force a backdown, Washington imposed a naval blockade on Iranian shipping and ports, while saying it would protect freedom of navigation for vessels travelling to and from non-Iranian ports. In real terms, however, there was no let-up on Iranian chokehold on the strait. In June, the two countries signed an interim peace deal for ceasefire and facilitation of conditions for a swift return to freedom of navigation in ⁠the Gulf. That deal unravelled before it took effect, with Iran resuming attacks on vessels said to be sailing contrary to ceasefire terms while the US restarted strikes avowedly aimed at ⁠degrading Tehran’s ability to target vessels in the Strait of Hormuz. Both sides have accused each other of violating the terms of their Memorandum of Understanding since it was agreed, with Trump declaring the deal “over” at the NATO summit in Turkey last month.

At the last count, not much has changed in Iranian capability to retaliate US attacks and keep its chokehold on Hormuz, despite that American forces have kept up strikes on Iranian targets in revenge for its putting commercial vessels in the waterway at risk. Amidst conflicting claims by both sides on the situation at the strait, agency reports late last week cited expert data showing that ship traffic through the waterway was near all-time low. Vessel transits were at a five-day average of about 13 as at last Tuesday, nearly the lowest level since mid-May, according to an analysis of data provided by trade intelligence. And that traffic includes ships of all types, from cargo vessels to oil tankers. Traffic volume was nearly 90 percent lower than the daily average of 130 ships that transited through Hormuz before the US and Israel attacked Iran on 28th February.

“Petrol could be cheaper in Nigeria but for multiple intermediary premiums in domestic crude supply”

Whereas oil prices are presently falling, the sustainability of the trend is doubtful as the International Energy Agency (IEA) warns that global oil stockpiles are rapidly depleting. In a report mid-last week, the agency said global stockpiles had fallen below 7.9billion barrels for the first time since April 2025, with the war in Iran continuing to strain supplies. It noted that inventory buffers for oil have been rapidly diminishing, and that the urgency of fully reopening the Strait of Hormuz has intensified. According to the global watchdog, oil prices have fluctuated wildly because of “sudden diplomatic pivots” stemming from the stop-and-start nature of ceasefire talks between Washington and Tehran. It projects the global oil market would run a deficit of 1.8million barrels per day in the third quarter of 2026 – more than double the estimate from just a month ago. The widening shortfall comes as 8.3million barrels per day of Gulf production remains offline, with renewed hostilities in July and early August stalling efforts to restore supplies.

But Iran seems ready for the long haul. A top military official was cited saying the longer the war lasted, the more experience Iran would gain and the more the point of future deterrence would be made. Asked in a media interview if the plan is to drag the conflict out until Trump finishes his term, the official said the goal was for Iran to “attain deterrence,” and one way of doing that was prolong the conflict and cause attrition such that if anyone wants to attack Iran, they’ll know there will be a cost.

Despite claims by Washington that it calls the shots at the Hormuz strait, Iran and Oman, on the other side of the strait, have been discussing a deal to manage the waterway considered an international route before the war. The proposed deal would give Tehran control over ships entering the Gulf through the strait, marking one ⁠of the biggest concessions yet to Iran. Agency reports said the new deal, being projected as a temporary solution, would allow ships to enter the Persian Gulf through an Iranian-controlled route and exit through an Omani-controlled route. Oversight on the chokepoint has become as much a red line for Tehran as the right to nuclear enrichment, and officials have insisted the situation at the strait would not return to its pre-war state when no country controlled shipping through the critical waterway.

Restoration of normalcy in the Gulf is a long way off and countries must look inwards for big reliefs. Here in Nigeria, the pump price of petrol has only inched down from levels reached following the outbreak of the Iranian war, but market dynamics portend a fixation at the still-exorbitant level if not a fresh resurgence in costs. Local refining is key to moderating consumer prices and Dangote refinery is the dominant player in that sector. Recent data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), however, showed that the refinery rejected some 15.5million barrels of domestic between April and June, this year.

In self-defence, Dangote group linked the rejection to difficulties in securing local crude directly from upstream producers at commercially viable prices. Vice President, Oil & Gas and Fertiliser, Devakumar Edwin, said the refinery remained fully committed to the Domestic Crude Supply Obligation (DCSO) programme and continued to seek Nigerian crude, but had faced challenges in obtaining sufficient volumes directly from domestic producers at competitive prices. According to him, that difficulty forced the refinery to source a significant portion of its Nigerian crude through International Oil Companies (IOCs) and other third-party intermediaries rather than directly from Nigerian upstream producers. 

Edwin explained that the involvement of intermediaries often resulted in additional premiums, transaction costs and other charges that made domestic crude more expensive for the refinery and imported crude more economically attractive. “Our position is straightforward. We are ready and willing to purchase Nigerian crude provided it is available in sufficient volumes and at competitive prices,” he said. Noting that reliable and commercially viable domestic crude supplies were crucial for sustainability of Nigeria’s refining industry and the refinery’s ability to produce petroleum products at lower prices for the domestic market, the executive warned that higher crude costs resulting from multiple intermediary premiums would ultimately affect end-consumers by way of increased product prices.

Get his point: Petrol could be cheaper in Nigeria but for multiple intermediary premiums in domestic crude supply that compelled Dangote refinery to opt for imported crude, which cost was fuelled by the Iranian war but yet offered a better alternative. Shakespeare says it isn’t in our stars that we are underlings but in ourselves.