Hormuz Remains Unsettled as US-Iran Talks Fail: The Battle for Oil-Flow Control Through the Strait of Hormuz

The US-Iran talks, which stretched for hours, ended without a breakthrough, dampening hopes of cooling tensions in the Middle East. For the global energy market, the central issue is not only the risk of military confrontation, but who controls the flow of crude oil through the Strait of Hormuz.

Hormuz does not need to be fully closed to disrupt markets

The Strait of Hormuz connects the Persian Gulf to the Indian Ocean, and a large portion of the world’s crude and LNG passes through it daily. It is a key export route for Saudi Arabia, the UAE, Kuwait, Iraq, Qatar and Iran.

While the traditional concern has been a complete blockade, a modern economy can be shocked without fully shutting the route. Slower ships, longer security confirmations, altered routes, or a ship owner choosing not to pass through the area can raise transport costs significantly. If insurers increase war premiums, banks tighten trade finance, or customers delay deliveries, the market reacts immediately.

In other words, the disruption often shows up as friction in the flow rather than an on/off blockage: shipping lanes may remain open, but commercial efficiency can fall sharply.

From resource ownership to resource access

For much of the 20th century, energy leverage was closely tied to ownership of oil fields. In the 21st century, however, resource ownership alone is not enough. A country with oil that cannot export stably—because of shipping access constraints, insurance limitations, payment obstacles, or difficulty reaching major customers—struggles to convert reserves into economic power.

As a result, oil prices can reflect not only supply and demand, but also the smoothness of the underlying trade system.

In this framework, energy power depends on a chain of systemic rights across the global value chain, including:

• the right to pass through strategic shipping lanes
• the right to energy cargo insurance
• the right to settlement in key currencies
• the right to access trade credit
• the right to storage and transshipment
• the right to reach end buyers

Hormuz is therefore not only a geographic chokepoint. It has become a symbol of access to global markets, where the flow of energy is shaped by control of “gateways” to trade and finance.

Businesses as gatekeepers of whether trade routes function

When tensions ease, markets often respond positively in the short term. But whether trade flows truly recover depends heavily on the private sector rather than political statements.

A single link in the chain—shipowners accepting voyage risk, insurers issuing guarantees, banks confirming and maintaining payments, traders finalizing contracts, destination ports provisioning enough capacity, and customers receiving goods on schedule—must align. If any link hesitates, the chain can slow or break.

If shipowners become concerned about security, fewer vessels may be willing to traverse the area. If insurers raise premiums or tighten conditions, deals become less efficient and costs rise. If banks tighten trade finance, importers can face working-capital constraints. If final customers delay deliveries, logistics chains lengthen, increasing inventory pressure and logistics costs.

That is why wars may cool faster than trade. Political signals can change within days, while business confidence often takes weeks or months to recover. Peace on paper does not necessarily translate into normal market functioning.

Impact and what to watch

Hormuz is both a geopolitical hotspot and a reflection of a power shift—from ownership of resources to control over access to resources. Control over the flow of oil, insurance, credit and logistics can create strategic advantages beyond simply owning reserves.

In an increasingly interdependent world, the new energy conflict is described as unfolding not only underground, but also on the seas, in banks, in insurance contracts and in market trust.

Policymakers and corporates, the article says, should focus on the resilience of the entire value chain—from shipping to insurance and finance—under stress conditions. It also notes that China’s response and other major economies’ strategies will influence how the oil market adapts to continued volatility, with the balance between security costs, insurance availability and access to financing shaping how quickly demand recovers and how energy prices adjust in coming quarters.