Iran war: Thought Hormuz couldn’t get worse? It just did
Monday, 13 April 2026
OPINION: US President Donald Trump’s blockade of the Strait of Hormuz marks a new and dangerous period in the conflict with Iran.
The blockade comes after unsuccessful talks to end the conflict, which were undertaken by US Vice-President JD Vance in Pakistan over the weekend.
At the time of writing, US Central Command (CENTCOM) has warned that all ships transiting the strait that have business with Iran will be blocked. All other ships will be allowed freedom of navigation.
“The blockade will be enforced impartially against vessels of all nations entering or departing Iranian ports and coastal areas, including all Iranian ports on the Arabian Gulf and Gulf of Oman. CENTCOM forces will not impede freedom of navigation for vessels transiting the Strait of Hormuz to and from non-Iranian ports,” a statement from CENTCOM said on X.
Read more:
Diesel reaches $3.90, oil back over US$100 a barrel on Hormuz impasse
NZ fuel stocks tick down, as tensions over Hormuz ratchet up
The blockade will begin at 2am on Tuesday morning (NZT), after Trump told media in Maryland:
'We've been very nice, we haven't ripped down too many bridges. We did one only because they broke their word. They broke their promise, and remember, their promise was that they were going to open the Hormuz Strait. They didn't do it. They lied,' he said.
The first thing to say is that this blockade — especially if it lasts for any extended period — will almost certainly drive up the cost of oil and refined fuels and exacerbate global fuel shortages.
That is because China and others not considered under the US umbrella by Iran have been able to continue to source Iranian oil during the crisis. That’s oil China did not need to source elsewhere. Crucially, China does have large oil reserves, although no-one is exactly sure how large. Some estimates put it at 1.2 billion barrels of crude oil.
Remember that at the start of the conflict, 20% of the world’s oil consumption passed through the Strait of Hormuz. The effective closure of the strait by Iran meant most of that dried up, except for oil from Iran or oil allowed to transit by Iran. Now that too will be cut off by the Americans. So the overall global supply of oil will dip again. China will have to buy from elsewhere or start dipping into its reserves at some point.
If it turns out that Trump capitulates and the blockade does not last long, then the price situation won’t worsen significantly. But if it turns into a long blockade, prices could well rise further.
It also raises the question of what happens if ships from, say, China take umbrage at not being allowed through the blockade. What happens then? Does some sort of standoff ensue? That is where the situation could get very hairy.
However, China has quietly sat by during this conflict, denouncing US actions when it wishes to and clearly understanding that the conflict already represents a hit to America’s global prestige and will make the domestic political economies of US allies and friends less favourable towards the US.
China also has an EV industry that stands ready to step in and supply vehicles around the world during an event that could tip global light vehicle fleets towards majority EV sales — effectively marking the beginning of the end for petrol and diesel passenger vehicles.
That’s the minimum upside. If it goes really well for Beijing, a wounded and isolated Iran might move from being a terrorist-exporting regional power to a full client state of China.
So it is difficult to see China wanting to escalate into a direct confrontation when it has already gained — and stands to gain — so much. But you never know.
While the fuel crisis has not yet arrived on New Zealand shores in the form of shortages, it is already punishing for businesses and households. And the daily developments in the war, along with the continued capriciousness of Donald Trump, mean that no-one can predict what will happen next.
Standing up for freedom of the seas matters, and stopping Iran from selectively blocking or taxing shipping should be a priority for the US — and everyone else. But it is far from clear whether Trump will ultimately decide that is his role.
What is clear is that, in the short term, the blockade raises geopolitical tensions, draws in more nations, creates a new flashpoint, and could push fuel prices even higher.