The Anatomy of the Strait of Hormuz
While missiles remain the real primary threat to commercial vessels transporting cargo, Iran has begun laying mines in the Strait in retaliation for attacks on its territory. Dozens have been laid in the past few days, according to reports, and could feasibly deploy hundreds more in the waterway.
Sea mines are an ‘asymmetric weapon’, deployed strategically to exploit an opponent’s weaknesses while bypassing traditionally stronger weapons such as bombs, which the U.S. continues to use in Iran. They are cheap to produce and deploy, and real-time attribution during conflict is difficult. Bombing is a blunt instrument against a mine threat. Removing a land mine is time-consuming and, even with an agreement, could take weeks. The Strait has become a slow-motion hostage situation, with much of the world’s oil supply at risk. The U.S. response is to escalate the conflict.
While the U.S. continues to attack minelayers, Iran’s ability to lay mines is not yet degraded enough for safe shipping. Prolonged disruption would create oil market conditions with few historical comparisons, testing emergency response mechanisms to their limits. Oil prices nearly reached $120 a barrel on the 9th of March before pulling back to around $87–88 for Brent.
An economic crisis is not here yet, but the groundwork is being laid. The first three steps—a supply shock, an oil price spiral, and now inflation transmission—have begun. Inflation transmission affects other goods and services because oil is used beyond petrol, embedded in much of what we rely on as a society; fertiliser, plastics, shipping costs, aviation, and manufacturing inputs. A sustained spike in oil prices would drive global inflation just as central banks in the US, EU, and Australia have spent years trying to reduce it. Vulnerable economies feel this third step first. For example, India, which imports about 40% of its crude oil through Hormuz, is among the most impacted.
Next is financial contagion, the stage at which a crisis becomes imminent. A sustained spike in oil prices amid inflation fears could prompt capital outflows from emerging markets. Following contagion, currency collapses for oil-importing developing economies would follow, then a spike in sovereign bond yields (cost of borrowing) in fragile states, demand destruction, and recession. The economic damage from the 1973 oil embargo took about 6–12 months to become apparent. Modern supply chains are more integrated, so hypothetically, transmission could be faster.
This model is similar to the 2008 domino succession. Time is the most important factor: how long will this last, and how much can supply chains withstand before capital moves from emerging markets and oil-importing developing economies begin to struggle? Pakistan, Egypt, Kenya, and Sri Lanka are already under pressure.
The Strait is indeed the centre of the crisis that the world is watching. What happens in the next few weeks will determine whether our global system holds or the whole structure comes down. And now, you know why.
References
United States Maritime Administration, "2026-004-Persian Gulf, Strait of Hormuz, and Gulf of Oman-Iranian Attacks on Commercial Vessels," MSCI Advisory, effective March 13, 2026, https://www.maritime.dot.gov/msci/2026-004-persian-gulf-strait-hormuz-and-gulf-oman-iranian-attacks-commercial-vessels.
Janes, "Iran Conflict 2026: Disruption to Strait of Hormuz Increases Energy and Food Production Risks," Janes Defence & Security Intelligence, 2026, https://www.janes.com/osint-insights/defence-and-national-security-analysis/iran-conflict-2026-disruption-to-strait-of-hormuz-increases-energy-and-food-production-risks.
Natasha Turak and Ruxandra Iordache, "Strait of Hormuz Crisis: US-Iran-Israel War, Shipping, Trade, Oil," CNBC, March 2, 2026, https://www.cnbc.com/2026/03/02/strait-of-hormuz-crisis-us-iran-israel-war-shipping-trade-oil.html.