If one were to judge solely by the performance of the US stock market, it would be easy to believe that the United States and Iran are on the verge of reaching a lasting rapprochement. However, since the two sides signed a temporary ceasefire agreement late on April 8, there has been little tangible progress toward any broader or more permanent settlement. More importantly, the issue attracting the greatest global attention remains the same: when will the Strait of Hormuz fully reopen? As long as the strait cannot operate normally, the global energy crisis will likely be increasingly severe.
Although the United States has explored various measures to restore shipping traffic through the Strait of Hormuz to pre-conflict levels, the results have been limited. Apart from April 11 and April 18, when 12 and 23 commercial vessels respectively transited the waterway, daily traffic following the temporary ceasefire has generally remained below 10 ships per day. Over the past week, financial markets have become increasingly optimistic that the strait could soon reopen, helping propel the three major US stock indices to fresh record highs. The reality, however, is far less encouraging. The number of commercial vessels passing through the strait has recently remained below four per day, with only a single vessel recorded on May 30.
While large-scale military confrontations between the United States and Iran have not resumed since April 8, the Strait of Hormuz remains far from normal operations. Consequently, the underlying global energy supply problem continues to deteriorate rather than improve. Adding to these concerns is the precedent set by the Iran-aligned Houthi movement in Yemen. Beginning on November 19, 2023, the Houthis launched attacks on commercial shipping in the Red Sea in response to Israel’s military operations in Gaza.
Subsequent missile and drone attacks significantly disrupted maritime traffic through the Bab el-Mandeb Strait, the strategic passage linking the Red Sea and the Gulf of Aden. Daily vessel traffic through the waterway fell by more than half from the 75 ships recorded on November 19, 2023, and even more than two years later, shipping volumes have yet to recover to their pre-crisis levels.
From Tehran’s perspective, the Strait of Hormuz has become one of its most valuable bargaining chips in negotiations with Washington. Unless the United States is prepared to meet Iran’s demands in full, Iran is unlikely to reopen the strait completely. Such an outcome appears highly improbable. As a result, either Iran may continue to restrict access to the waterway, or the United States could resort to a renewed large-scale military campaign against Iran in an attempt to restore normal maritime operations.
Both scenarios point to the same conclusion: the Strait of Hormuz is unlikely to return to normal functioning within the next six months. If that proves to be the case, the global energy crisis is poised to intensify further, with potentially far-reaching consequences for energy markets, inflation, and economic growth worldwide.
Andrew Wong is a veteran independent commentator
