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Iran’s Strait of Hormuz blockade fuels global oil market concerns as Trump admin meets execs
Jonathan Hunt delivers a live report from London, highlighting Iran’s assertive maneuvers in the Strait of Hormuz, which have resulted in a dramatic 95% decrease in commercial shipping activities. Mohamed El-Erian, who chairs Gramercy Funds Management, offers insight into the turmoil in the global oil market, noting a sharp rise in crude oil prices. As a countermeasure, the Trump administration convenes with oil industry leaders while international partners such as Japan and European countries issue a collective statement, affirming their commitment to maintaining secure passage through this critical maritime corridor.
The escalating Strait of Hormuz situation is propelling countries to explore new trade routes from the Gulf to Europe. At the forefront is Iraq’s ambitious $24 billion “Development Road” initiative, as highlighted by analysts.
According to Muhanad Seloom, an analyst with the Middle East Council on Global Affairs, Iraq’s new trade path, stretching from the Grand Faw Port to Turkey and onwards to Europe, is progressing steadily. Seloom described it to Fox News Digital as a lasting and significant shift in response to wartime challenges.
Amidst these developments, President Donald Trump issued a stern warning to Tehran regarding further provocations in the Gulf, emphasizing that the U.S. is ready to take action to ensure the strait remains navigable.
Iranian military forces have deployed mines and issued threats against commercial vessels in the strategic passage. As of Sunday, this vital shipping lane remains largely obstructed.
A man walks along a road during a sand storm in Basra, Iraq, on March 4, 2022. (Hussein Faleh/AFP)
“Iraq’s Development Road means every container moving through Basra instead of Iranian-controlled waters is a reduction in Tehran’s leverage over Iraq,” said Seloom.
“The real scale, independent estimates put the Development Road closer to $24 billion, and the project is now moving with discipline,” he said.
Iraq’s Prime Minister Mohammed Shia al-Sudani inaugurated the first 63-kilometer stretch of the Development Road in 2025. Phase 1 is due for completion by 2028.
“What was described by the Iraqi government as a flagship of Iraqi statecraft now has a regional rationale that governments and financiers treat as essential rather than aspirational,” Seloom, an assistant professor at the Doha Institute for Graduate Studies, explained.
“Sudani seems to be positioning Iraq exactly where he thinks its geography always suggested, as a connecting state between the Gulf, Turkey and Europe,” he said.
Cargo ships are anchored 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, Seloom says, is also being pushed forward in parallel.
Saudi Arabia’s East-West Petroline pipeline is operating near its 7 million-barrel-per-day capacity, with expansion plans under review.
The UAE’s ADCOP pipeline to Fujairah is also at maximum use, with a second line under discussion, he said. “Turkey’s Zangezur and Middle Corridors bypass Iran via the Caucasus and are four to five years out.”
He added: “Six Gulf-backed overland fiber projects are also underway through Syria, Iraq and the Horn of Africa.”
Iran reimposed closure measures on the Strait of Hormuz on April 18, reducing traffic to just a handful of vessels per day compared with a pre-war average of roughly 130 to 140.
The restrictions, including on ships, have come under fire in recent days, and interceptions trace back to the start of the war on Feb. 28, when Tehran first moved to block transit following U.S.-Israeli strikes.
Maps4Media processed and enhanced Sentinel-2 satellite imagery shows a broad view of the Strait of Hormuz between southern Iran and Oman’s Musandam Peninsula, including surrounding islands, coastal terrain, and turquoise shallow-water zones at the entrance to the Persian Gulf. (Maps4media via Getty Images)
“Hormuz remains indispensable for energy, but it is no longer treated as a default. That shift is permanent given the war,” Seloom said.
For Iraq’s corridor, it is “potentially transformative,” Seloom said, with $4 billion per year in projected transit revenue and a repositioning from an oil rentier state to a logistics state.
“Turkey will be the single largest beneficiary. Combined with the Zangezur and Middle Corridors, Ankara becomes the overland bridge between Asia and Europe,” he said. “Europe will have an additional overland option on a 2028-plus timeline, but nothing for the current crisis. It marginally reduces structural dependence on the unreliable Suez–Red Sea axis.”