Why Iran is using passage through Strait of Hormuz as geopolitical ‘ransom’

Iran is reportedly allowing some ships to travel through the Strait of Hormuz, a vital shipping chokepoint to access the resource-rich Persian Gulf.

As Iran allows some ships but not others to travel through the Strait of Hormuz, a vital shipping chokepoint, the arrangements amount to what one expert calls a form of geopolitical “ransom.”

The Strait of Hormuz normally sees about 20 per cent of the world’s crude oil supply pass through, in addition to other vital resources. Since the war began, the price per barrel of oil has spiked worldwide, and economists expect that to drive up inflation very soon, including in Canada.

“If you allow anyone to block an international waterway and select who goes through based on favourable policies or outright ransom, you will always pay that ransom,” says Aurel Braun, a professor of international relations and political science at the University of Toronto.

On Monday, U.S. Treasury Secretary Scott Bessent said that they were aware some ships were getting through in recent days.

“We are seeing more and more of the fuel ships start to go through. The Iranian ships have been getting out already, and we’ve let that happen to supply the rest of the world. We’ve seen Indian ships go out now … we believe some Chinese ships have gone out,” he told CNBC in an interview.

“That should start ramping up before there are any of the flotillas or protective armadas in the Gulf. So we think that there will be a natural opening that the Iranians are letting out. And for now, we’re fine with that. We want the world to be well supplied,” Bessent said.

But who benefits and who does not when only certain ships are allowed to pass through?

Blocking the Strait of Hormuz may be one of Iran’s most powerful leverage tools in the war because it allows the nation to do economic damage to other nations, including the U.S. and Israel, by forcing oil prices higher and making virtually all other goods and services more expensive.