What Just Changed

When we last reported, Iran was selectively allowing ships from 'friendly' nations — India, Pakistan, Turkey, and China — to pass the Strait of Hormuz, sometimes after paying tolls to the Islamic Revolutionary Guard Corps. That arrangement is now over.

According to Al Jazeera, Iran has closed the strait to all commercial shipping, after U.S.-led naval operations began capturing or turning back Iran-linked vessels across the Gulf and into the Indo-Pacific. Tehran called it piracy. Washington calls it a blockade. Roughly 2,000 ships are now stranded in the Persian Gulf with nowhere to go.

Tankers Going Dark to Slip Through

Some ships aren't waiting around.

According to Breitbart, two tankers completed the crossing this week with their Automatic Identification System (AIS) transponders switched off — making them effectively invisible to standard tracking. The VLCC Nissos Keros, flagged to the Marshall Islands and chartered by Swiss trading firm Vitol, carried 1.8 million barrels of UAE crude and is headed for India's port of Visakhapatnam. The other, Hua Lin Wan — a Chinese-flagged LNG tanker operated by state-owned COSCO — is carrying naphtha from Kuwait and is bound for China's port of Huizhou.

COSCO president Lin Ji told Lloyd's List that his company is "coordinating vessel withdrawals" and prioritizing crew safety. He did NOT specify who COSCO is coordinating with.

A third tanker, the Umm Al Ashtan, went dark near the UAE coast on May 1, reappeared off Oman headed for India, and its manager — Abu Dhabi National Oil Company (ADNOC) — refused to comment on how it got through. Every single ship operator that successfully ran the strait declined to answer whether they paid the IRGC.

Malaysia Played Middleman

According to Reuters, as cited by Breitbart, the government of Malaysia asked Iran directly to allow seven ships safe passage — including the supertanker VLCC Eagle Veracruz, which reportedly made it through and is now headed for China's port of Quanzhou loaded with Saudi crude.

A NATO-adjacent country is quietly negotiating with a U.S.-sanctioned terror organization to move oil.

Treasury Sanctions Iran's New Toll Booth

On Wednesday, the U.S. Treasury Department announced sanctions against Iran's Persian Gulf Strait Authority (PGSA) — the IRGC-created body that has been shaking down international shipping for passage fees. Treasury is formally labeling the toll operation as a terrorist revenue scheme.

Whether sanctions alone change Iran's calculus is a separate question. The PGSA was already collecting money from ships that aren't supposed to be dealing with Iran in the first place.

India's Scramble: Africa and Latin America

India is not waiting to find out how this ends.

According to Breitbart, Indian refineries are actively seeking alternative crude supplies from Latin America and Africa to compensate for the loss of Gulf flows. India was one of the world's largest buyers of Persian Gulf crude — the disruption hits New Delhi directly in the wallet and in the tank.

Operation Urja Suraksha — India's energy security response to the crisis — reflects how seriously the Indian government is treating this. India is rewiring its supply chains in real time.

The Mine Problem

Even if a ceasefire happened tomorrow and the strait technically reopened, it wouldn't be open. Al Jazeera reported that the U.S. says it will take six months to clear mines it believes Iran has laid in the strait. Maritime insurers already canceled 'war risk' coverage back in March. Those premiums have jumped from roughly 0.25 percent of hull value to as much as 5 percent — a 20x increase — according to shipping insurers who spoke to Al Jazeera.

The U.S. Energy Information Administration had already flagged the strait as the world's most critical oil chokepoint, noting that 20 million barrels per day — about 20% of global petroleum consumption — flowed through it in 2024. Unlike other chokepoints, the Strait of Hormuz has no practical alternative for most of the volume it carries.

The mine threat means the economic damage outlasts any political settlement. Insurers don't care about peace deals. They care about verified, cleared waterways.

The Operational Reality

Most mainstream outlets are treating this as a geopolitical chess match between the U.S. and Iran. It is — but it's also a logistical catastrophe unfolding for every economy that runs on oil. Ships are running dark through a mined strait. A Swiss trading company and a Chinese state shipping giant are refusing to say if they paid the IRGC. India is rebuilding its entire oil import strategy on the fly.

None of that gets fixed at a negotiating table in Islamabad.

The Outlook

Fuel prices, shipping costs, and insurance premiums are going up — and they're staying up even after this ends. The mines alone guarantee six months of elevated risk regardless of any ceasefire. Every American who fills a gas tank or buys anything that gets shipped is paying for this crisis. And the IRGC is still collecting tolls.