Iran’s Strait of Hormuz blockade fuels global oil market concerns as Trump administration meets executives
Jonathan Hunt reports live from London on Iran’s aggressive actions in the Strait of Hormuz, which have led to a 95% reduction in commercial shipping traffic. Mohamed El-Erian, Chairman of Gramercy Funds Management, analyzes the disruption in the global oil market, with crude oil prices soaring. The Trump administration is meeting with oil executives as international allies such as Japan and European countries issue a joint statement expressing their willingness to ensure safe passage through the vital waterway.
The Strait of Hormuz crisis is boosting countries’ efforts to develop alternative trade routes from the Gulf to Europe, with Iraq’s $24 billion ‘Development Road’ project at the forefront, analysts say.
Seloom’s comments came as President Donald Trump warned Tehran against further escalation in the Gulf and signaled that the US is ready to take action to keep the strait open.
Iranian forces have laid mines and threatened commercial traffic in the narrow waterway. The sailing route will remain effectively closed from Sunday.
IRAN IS TRYING TO GIVE THE GLOBAL ECONOMY A HEART ATTACK BY CLOSING THE STRAIT OF HORMUZ, SAYS UAE MINISTER
A man walks along a road during a sandstorm in Basra, Iraq, on March 4, 2022. (Hussein Faleh/AFP)
“Iraq’s Development Road means that every container moving through Basra instead of Iranian-controlled waters is a reduction in Tehran’s influence over Iraq,” Seloom said.
“The actual size and independent estimates put the Development Road closer to $24 billion, and the project is now proceeding with discipline,” he said.
Iraqi Prime Minister Mohammed Shia al-Sudani inaugurated the first 63-kilometer section of the Development Road in 2025. Phase 1 should be completed in 2028.
“What was described by the Iraqi government as a flagship of Iraqi statecraft now has a regional rationale that governments and financiers see as essential rather than aspirational,” explains Seloom, an assistant professor at the Doha Institute for Graduate Studies.
“Sudani appears to be positioning Iraq exactly where he thinks its geography has always suggested: as a connecting state between the Gulf, Turkey and Europe,” he said.
WATCH as shipping through the Strait of Hormuz comes to a standstill amid a conflict with Iran
Cargo ships anchor in the Gulf near the Strait of Hormuz, as seen from northern Ras al-Khaimah, United Arab Emirates, on March 11, 2026. (REUTERS/Stringer/File Photo/File Photo)
But other regional infrastructure, says Seloom, is also being pushed forward in parallel.
Saudi Arabia’s East-West Petroleum Pipeline is almost in operation, with a capacity of 7 million barrels per day, and expansion plans are currently under review.
The ADCOP pipeline from the UAE to Fujairah is also being maxed out, and a second line is being discussed, he said. “Turkey’s Zangezur and Central Corridors bypass Iran via the Caucasus and are four to five years away.”
He added: “There are also six Gulf-backed overland fiber projects underway through Syria, Iraq and the Horn of Africa.”
Iran reimposed closure measures for the Strait of Hormuz on April 18, reducing traffic to just a handful of ships per day, compared to a pre-war average of around 130 to 140.
The restrictions, including on ships, have come under fire in recent days, with the interceptions dating back to the start of the war on February 28, when Tehran first took action to block transit after US-Israeli attacks.
WAR IN IRAN, 11 DAYS IN: US CONTROLS AIR, OIL FLOWS AND REGION SUPPORTS FOR WHAT’S NEXT
Sentinel-2 satellite images processed and enhanced by Maps4Media show a broad view of the Strait of Hormuz between southern Iran and Oman’s Musandam Peninsula, including surrounding islands, coastal area and turquoise shallow water zones at the entrance to the Persian Gulf. (Maps4media via Getty Images)
“Hormuz remains indispensable for the energy sector, but is no longer considered standard. That shift is permanent given the war,” Seloom said.
For the Iraqi corridor, it is “potentially transformative,” Seloom said, with $4 billion a year in expected transit revenues and a repositioning from an oil rent state to a logistics state.
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“Turkey will be the biggest beneficiary. Combined with the Zangezur and Central Corridors, Ankara will become the land bridge between Asia and Europe,” he said. “Europe will have an additional land option from 2028, but nothing for the current crisis. It marginally reduces structural dependence on the unreliable Suez-Red Sea axis.”
