The emerging 2-tier system for moving oil through dangerous waters
The road less traveled, or the waters more mined.
If you’re looking to move oil through the Persian Gulf, best be a nation that’s friendly with Iran — and willing to take the road less traveled.
Natasha Kaneva, head of global commodities research at JPMorgan, notes that at least four ships have taken an unusual route in between two islands to pass through the Strait of Hormuz.
These unusual circumstances “could reflect a process designed to confirm vessel ownership and cargo, enabling passage for ships that are not affiliated to the US or its allies,” she wrote. “In practice, this creates a system in which the Strait is not formally closed, yet transit increasingly depends on political understandings with Tehran.”
Kaneva believes that China, India, Pakistan, and Turkey have “the best chance of preferential access.” Most of these countries get from roughly 40% to 55% of their imported crude through this waterway, with Turkey an outlier at less than 10%, per JPMorgan.
Effectively, it seems as though Iran has set up VIP access (or a special customs checkpoint, if you will) for oil in transit, while the US aspirationally aims to have a coalition to establish another, more fraught lane through waters that may be mined and subject to drone attacks.
Expectations for how high oil prices will climb this year have moderated somewhat this week, with prediction markets suggesting $135 for front-month West Texas Intermediate as the most likely 2026 peak.
(Event contracts are offered through Robinhood Derivatives, LLC — probabilities referenced or sourced from KalshiEx LLC or ForecastEx LLC.)
Sustaining this backdrop would likely entail some but not a full improvement in the global flow of oil through this important choke point. But to call this a fragile equilibrium would be an understatement.
Iran has demonstrated leverage over the flow of oil through the strait through its ability to harry vessels. US President Donald Trump, in turn, has shown the willingness to display America’s potential leverage over Iran’s oil export capabilities through attacks on Kharg Island, which handles about 90% of the country’s oil exports. Crucially, the US hit military sites, rather than energy infrastructure, in its initial strikes on the island.
