Iran’s recent attacks on commercial shipping in the Strait of Hormuz caused a sharp rise in oil prices, underscoring Tehran’s continued ability to disrupt global energy markets. However, experts suggest that Iran’s capacity to use this strategic waterway as economic leverage against the US may be diminishing.

Vice President JD Vance linked global oil supplies to ongoing negotiations with Iran, stating in a June 30 interview on the "Michael Knowles Show" podcast, "I think what the president has told us to do is use this MoU (memorandum of understanding) to sort of refill the world's oil economy, to refill some stocks, and then to see where the hand is."

This approach faced a significant test after Iran renewed attacks on commercial shipping, which prompted fears of broader conflict and pushed oil prices higher. Despite this, the Energy Information Administration (EIA) recently forecast that worldwide crude production and trade flows will rebound to near pre-conflict levels by the end of 2026, with most previously shut-in production returning in early 2027.

Experts note that growing oil production, alternative export routes, and new shipping patterns are steadily weakening Iran’s ability to weaponize the Strait of Hormuz. For instance, the Islamic Revolutionary Guard Corps (IRGC) has attempted to make the Strait commercially unworkable, but alternative southern routes create pathways that Iran cannot control or toll.

One expert commented, "These attacks on shipping to me aren't random. They're strategy."

While Iran can still trigger short-term price shocks, the broader outlook suggests that additional oil supply is expected to continue reaching global markets unless the conflict escalates into a sustained disruption.

Sources