The Strait of Hormuz Is “Open”—But for Whom? Iran’s Smuggling Claims Expose the Real Battle Over Global Oil

Tehran says Washington is confusing the movement of oil with control of the world’s most strategically important energy chokepoint. The dispute reveals a deeper truth: a maritime passage can remain physically navigable while becoming economically dangerous, politically contested and militarily controlled.

The Strait of Hormuz is one of the few places on Earth where a relatively narrow stretch of water can influence energy prices, international trade, military strategy and the economic security of entire nations. When tensions rise in the strait, the consequences extend far beyond the Persian Gulf, reaching oil-importing economies in Asia, energy markets in Europe and fuel consumers across Africa.

That is why a striking exchange between Drop Site News and Iranian political and military figure Mohsen Rezaei deserves closer examination.

Asked how Iran could claim control over the Strait of Hormuz if oil flows had returned to pre-war levels while Iranian oil exports remained restricted, Rezaei challenged the premise of the question. He argued that the movement of some vessels did not prove the strait was genuinely open in the normal commercial sense. According to him, shipments were being transferred between vessels in the coastal waters of Oman and moved through informal, high-risk networks that he characterized as smuggling operations backed by the United States and its regional partners.

Rezaei also alleged that Iranian forces had been striking an average of five vessels associated with these operations every night over the preceding two or three months. He claimed that payments to captains and navigators had increased from roughly $10,000–$15,000 to as much as $100,000 because of the risks involved.

These are serious allegations. They should not be treated as independently verified facts without corroborating evidence. But the argument behind them raises an important strategic question: Does the movement of oil through a contested waterway prove that the waterway is under effective control, or can ships continue moving while the cost, risk and conditions of passage are radically altered?

The answer matters because maritime access is not simply a question of whether a ship can physically cross a line on a map. It is also a question of whether commercial operators can move cargo predictably, insure vessels at reasonable rates, secure crews and deliver energy without facing unacceptable risks.

Control Is Not the Same as Closure

The central distinction in Rezaei’s argument is between an open strait and a strait in which some ships continue to move despite coercion, military threats or extraordinary costs.

A waterway does not have to be completely closed for its strategic value to be disrupted. A government or armed force may be unable to stop every vessel, yet still influence shipping decisions by making certain routes dangerous, threatening particular cargoes, imposing restrictions or raising the prospect of attack.

This is the difference between absolute control and the ability to impose costs.

Absolute control would mean the ability to determine, with near-total effectiveness, which vessels pass, when they pass and under what conditions. That is an extremely high bar in a busy international waterway. Effective coercive control, by contrast, may involve the ability to deter some operators, disrupt selected shipments, increase insurance premiums or force shipping companies to adopt more expensive arrangements.

Rezaei’s account appears to rest on the second definition. His argument is that vessels continuing to transport oil do not necessarily demonstrate that normal maritime commerce has resumed. If operators must pay exceptional sums to crews, transfer cargo through complicated networks or accept the possibility of attack, then the waterway may remain operational while being far from commercially normal.

That argument is strategically plausible. But whether it accurately describes the situation in the Strait of Hormuz depends on evidence about actual shipping movements, vessel incidents, insurance costs, cargo transfers and the extent of Iranian interference.

There is a difference between explaining how coercive maritime power works and proving that a particular state is exercising it successfully. Rezaei’s interview makes the former argument forcefully; the specific allegations require independent verification.

Why the Strait Matters So Much

The Strait of Hormuz connects the Persian Gulf with the Gulf of Oman and the wider Indian Ocean. It is the principal maritime outlet for major oil and gas producers, including Saudi Arabia, Iraq, Kuwait, Qatar, the United Arab Emirates and Iran.

Its importance is not merely geographical. It is structural: a substantial volume of internationally traded energy must pass through a relatively confined maritime corridor, making disruption there difficult to replace quickly.

Alternative pipelines and export routes exist, but they cannot fully substitute for the scale and flexibility of maritime transport. A sustained disruption can therefore affect the availability of crude oil, petroleum products and liquefied natural gas, while also increasing uncertainty about future deliveries.

For Iran, proximity to the strait creates strategic leverage. Iranian forces operate near the waterway, and Tehran has long understood that threats to shipping can influence the calculations of the United States and its regional partners.

For Washington, maintaining navigation through the strait is a major strategic objective. The United States has built a substantial regional military presence and works with Gulf partners to protect shipping and deter attacks.

Neither side needs to achieve total dominance for the contest to have economic consequences. Even a limited threat can influence decisions made by shipowners, insurers, energy traders and governments thousands of kilometres away.

That is the strategic significance of Rezaei’s claim: he is arguing that Washington cannot establish the normality of the waterway simply by pointing to the continued movement of oil.

The Smuggling Allegation: What Rezaei Is Actually Claiming

Rezaei describes a system in which cargo is allegedly transferred from larger vessels to smaller boats before being moved onward to other ships. He portrays these movements as smuggling operations supported by American military leadership and personnel from the United Arab Emirates.

According to his account, Iranian forces have targeted vessels involved in these activities, while the elevated payments to captains and navigators reflect the dangers of operating in the area.

Several elements of this account need to be separated.

First, ship-to-ship transfers are not inherently illegal. They are used in legitimate commercial shipping, including to move cargo between vessels, manage logistics and accommodate port or draft restrictions. Such transfers can also be used to obscure the origin, ownership or destination of cargo. The legal and factual significance depends on the particular shipment, the parties involved, applicable sanctions and the circumstances of the transfer.

Second, a vessel carrying Iranian oil is not automatically evidence of Iranian control over the Strait of Hormuz. Oil can reach international markets through intermediaries, complex ownership structures and indirect shipping arrangements. Such practices may help sellers navigate sanctions or conceal the origin of cargo, but they do not establish who controls the surrounding waterway.

Third, the assertion that the United States is directing the alleged smuggling network is a distinct allegation requiring evidence. The presence of American forces in the region does not, by itself, prove that Washington organizes or protects illicit cargo transfers.

Finally, Rezaei’s claim that Iranian forces have struck five vessels every night over two or three months is exceptionally consequential. If accurate, it would imply a sustained pattern of maritime attacks with potentially significant implications for commercial shipping and regional security. Such a claim should be tested against incident reports, vessel-tracking data, maritime advisories, insurance information and independent reporting.

Until those details are corroborated, the numbers should be understood as Rezaei’s account—not as an established record of maritime incidents.

The distinction is important. A serious analysis must neither dismiss the possibility of covert shipping networks nor accept a military or political figure’s description of them without verification.

The United States and the Politics of Declaring a Waterway Open

Rezaei’s criticism is directed not only at maritime operations but also at the political language used to describe them.

When an American president declares that the Strait of Hormuz is open, the statement can serve several purposes. It may reassure energy markets, signal confidence in naval operations, discourage panic buying and communicate that Washington will not allow a strategic chokepoint to be closed by a regional adversary.

But such declarations can become misleading if they reduce a complicated security situation to a binary question: open or closed.

A waterway can be open in a narrow physical sense while commercial conditions remain abnormal. Vessels may continue passing, but some operators may avoid the area. Insurers may raise premiums. Crews may demand higher compensation. Shipping companies may reroute vessels or require additional security. Traders may price in the possibility of future disruption.

Under those circumstances, the passage remains navigable, but the cost of using it rises.

Conversely, a high-risk environment does not automatically prove that Iran controls the strait. A waterway may remain open because commercial operators continue to accept the risks, because naval forces deter attacks, because most traffic is unaffected, or because the reported incidents are limited or disputed.

The appropriate test is therefore not whether a political leader says the strait is open—or whether an Iranian official says it is controlled. The test is what the evidence shows about actual access, security, costs and the ability of different actors to influence maritime movement.

A declaration of openness is a claim that should be measured against conditions at sea, not accepted as a substitute for them.

The Oil-Flow Paradox

The question put to Rezaei contains a genuine economic puzzle: if oil flows have returned to pre-war levels while Iranian exports remain restricted, what does that say about Iran’s claim of control?

The answer depends partly on what the reported figures measure.

Aggregate oil flows through the strait are not the same thing as Iranian oil exports. The waterway carries energy from multiple producers. Saudi, Iraqi, Kuwaiti, Emirati and Qatari shipments can continue even if Iranian cargoes face restrictions. Strong overall traffic can therefore coexist with severe constraints on Iran’s own ability to sell and deliver oil.

Likewise, the volume of oil moving through a route does not, by itself, reveal the level of risk facing individual vessels. Total flows could recover while particular operators remain exposed to threats, delays or elevated costs.

But the reverse is also true: if aggregate traffic has genuinely returned to normal, that would be relevant evidence against any claim that Iran has achieved a comprehensive or sustained closure of the strait. It would not eliminate the possibility of selective interference, but it would make a claim of total control much harder to sustain.

This is where Rezaei’s distinction between conventional shipping and alleged smuggling becomes crucial. He is suggesting that headline flow figures conceal a more dangerous and irregular system of transportation.

That proposition can be tested. Analysts can compare vessel transits with historical averages, examine changes in the composition of traffic, track ship-to-ship transfers and assess whether shipping costs have risen unusually. They can also distinguish between crude oil and other petroleum cargoes, between Iranian exports and shipments from other Gulf producers, and between vessels that transit the strait and cargoes that are merely transferred nearby.

Without those distinctions, arguments about oil flows risk becoming political talking points rather than meaningful evidence.

The Economic Weapon Is Uncertainty

The most important strategic consequence of a contested strait may not be a complete halt in shipments. It may be the uncertainty that surrounds them.

Oil markets are forward-looking. Traders do not wait for every tanker to stop before accounting for the risk of disruption. If they believe future supply could be interrupted, prices can rise before any physical shortage appears.

Shipping companies make similar calculations. A route that remains technically usable may become less attractive if the probability of attack increases or insurance becomes prohibitively expensive. A shipowner does not need to believe that every vessel will be targeted. It may be enough to believe that the financial consequences of a single incident are too severe.

This creates a strategic asymmetry. Defending every vessel and maintaining confidence in commercial shipping can be expensive. Threatening shipping, by contrast, may require fewer resources—although sustaining credible threats against a capable naval coalition is itself difficult and risky.

The result is that a state or armed actor may gain leverage without fully closing a waterway. It can attempt to shape the behaviour of commercial operators by increasing the expected cost of transit.

That does not mean such leverage is unlimited. Prolonged attacks can provoke military retaliation, accelerate the development of alternative routes, encourage international cooperation against the attacker and damage the attacker’s own economic interests. Gulf states also depend on stable energy exports, and Iran itself has reasons to avoid a crisis that undermines regional commerce or triggers a wider conflict.

Maritime coercion is therefore a powerful but dangerous instrument. It can create bargaining leverage, but it can also produce consequences that are difficult to control.

Why Oil Exports Can Recover Without Iran Losing All Its Leverage

Recent reporting illustrates the complexity of the dispute.

A report by the Financial Times published on October 21, 2026, said Gulf oil exports excluding Iran had recovered above their pre-war average during the week ending October 18. Yet shipments through the Strait of Hormuz remained more than a third below pre-war levels, as producers and shipping companies relied on alternative routes, including pipelines, Red Sea ports and ship-to-ship transfers. <Cite refs={["turn229988news38"]} />

This distinction is central to understanding the argument.

Oil leaving the Middle East is not necessarily oil passing through Hormuz. Saudi Arabia can redirect crude through its East-West pipeline to Red Sea terminals. The United Arab Emirates has an export pipeline to Fujairah, outside the strait. Other producers and shipping companies can adjust logistics, deploy shuttle tankers or move cargo between vessels.

These alternatives can preserve a substantial proportion of exports even when the principal shipping corridor is disrupted. But they do not eliminate the costs, capacity limits or security risks associated with the crisis.

The International Energy Agency has also documented the scale of the disruption. Its analysis reported that Hormuz flows averaged only 7.6 million barrels per day in August 2026, well below pre-war levels. <Cite refs={["turn229988search7"]} /> The apparent recovery in overall exports therefore needs to be interpreted alongside the changing routes used to transport those exports.

This produces a paradox: the more effectively Gulf producers develop alternatives to Hormuz, the less dependent their immediate export volumes become on the strait. Yet the fact that they must develop those alternatives can itself demonstrate the economic consequences of insecurity there.

For Iran, the question is whether it can still influence the cost and security of the routes that remain dependent on the waterway. For Washington, the challenge is to keep energy moving without allowing the cost of protection and diversion to become an enduring burden on the global economy.

Neither side can claim victory solely from the aggregate volume of oil exported.

Is Iran Actually in Control?

The word control is doing considerable work in this debate.

Iran's geographic position gives it a significant capacity to threaten or disrupt shipping. Its military capabilities and proximity to the strait mean that any serious assessment of maritime security must account for Tehran's ability to impose risks.

But geographical advantage is not the same as uncontested sovereignty over an international waterway.

The Strait of Hormuz is governed by an international legal framework that includes the United Nations Convention on the Law of the Sea (UNCLOS). The convention provides for transit passage through straits used for international navigation, although the precise legal questions in a particular conflict depend on the applicable rules, the states involved and the conduct being assessed.

Iran has not ratified UNCLOS, and its position on the application of certain transit-passage provisions differs from that of states that are parties to the convention. That disagreement does not mean that any state can simply declare an internationally used strait its exclusive possession.

The legal issue is distinct from the military reality. A state may be capable of disrupting traffic without having an internationally recognized legal right to dictate all passage. Equally, a legal entitlement to navigate does not guarantee that vessels can safely exercise it during a war.

This is why Rezaei's assertion that Iran "controls" the strait needs qualification. If he means that Iran possesses the ability to make passage more dangerous and to influence the decisions of some shipping operators, the claim describes a form of coercive leverage. If he means that Iran can completely determine maritime traffic, the evidence of continuing exports, alternative routes and international naval activity makes that a much stronger claim to establish.

A serious assessment must also consider whether Iran can sustain such pressure without triggering a response that undermines its own objectives.

Control is not a slogan. It is a question of capability, durability, cost and the degree to which other actors can resist or circumvent the actor exercising pressure.

The Environmental and Human Cost of Maritime Attacks

Rezaei's description of vessels being struck raises a further question: who decides which ships are legitimate targets?

Labelling a vessel a smuggler does not, by itself, settle its legal status or establish that an attack against it is lawful. The answer depends on the vessel's activities, the applicable law governing the conflict, the circumstances of the attack and the evidence available.

Commercial ships carry crews whose lives are not abstract variables in a geopolitical contest. Seafarers may have little control over the strategic decisions made by governments, cargo owners or shipping companies. An attack can kill or injure crew members, cause fires, release oil and other hazardous substances, and create risks for nearby vessels.

A damaged tanker can also produce environmental consequences that last long after the immediate military incident. Oil pollution in the Gulf could threaten marine habitats, fisheries, coastal livelihoods and desalination infrastructure on which communities depend.

If Iranian forces are indeed striking multiple vessels on a sustained nightly basis, as Rezaei alleges, the international community should demand evidence about the incidents, the targets and the legal justification for the attacks. If the United States or its partners are involved in the operations he describes, those allegations likewise require transparent examination.

Neither military power nor a claim of national security should exempt governments from scrutiny.

The same standard should apply to all parties: establish what happened, identify who was responsible, determine whether the conduct was lawful, and hold those responsible for unlawful attacks accountable.

The United States, Iran and the Risk of Escalation

The dispute is also a contest over deterrence.

Washington wants to demonstrate that it can protect maritime commerce and prevent Iran from using the strait as a strategic weapon. Tehran wants to demonstrate that military pressure against Iran will carry costs that Washington cannot easily contain.

Each side is attempting to influence the other's calculation of risk.

For the United States, escorts, regional military deployments and efforts to restore commercial confidence can reduce the likelihood that shipping companies abandon the route. But those operations can also expose American personnel and assets to further confrontation.

For Iran, the threat of disruption can provide bargaining leverage. But the strategy carries substantial risks: it can alienate neighbouring countries, damage regional trade, invite further military action and encourage energy producers to invest in routes that bypass Iranian influence.

The broader danger is that both sides may interpret the other's actions as evidence that escalation is working.

Washington may conclude that more military pressure is needed to restore navigation. Tehran may conclude that continued disruption is necessary to demonstrate that pressure on Iran cannot be imposed without consequences. In such an environment, a local maritime incident can rapidly become part of a wider military confrontation.

That is why public declarations of victory should be treated cautiously. A government may demonstrate tactical success while making a durable settlement harder to achieve.

The more consequential measure is whether the parties can establish predictable conditions for navigation, reduce attacks, clarify the rules governing passage and negotiate arrangements that prevent future disputes from repeatedly threatening energy supplies.

What This Means for Nigeria and Africa

For Nigeria and other African oil-importing economies, the Strait of Hormuz crisis is not a distant geopolitical spectacle. It is a reminder that energy security depends on more than the amount of oil produced or the price quoted on international markets.

Nigeria is an oil-producing country, but its domestic fuel prices and energy costs remain influenced by international crude prices, exchange-rate movements, refining capacity, transportation expenses and the structure of its domestic fuel market. A disruption that raises global oil prices can therefore affect transport fares, food distribution, electricity generation and the operating costs of businesses.

Higher crude prices can also benefit oil-exporting governments through increased revenue, but that benefit is neither automatic nor evenly distributed. Production constraints, financing costs, domestic consumption, exchange-rate pressures and the way public revenue is managed all affect the outcome. Meanwhile, consumers can face higher prices even when the state receives more income from oil exports.

The crisis also demonstrates why Africa should not confuse resource ownership with energy security. A country may possess substantial oil and gas reserves yet remain vulnerable to external shipping routes, international price movements, imported refined products and decisions made by foreign governments or commercial intermediaries.

For African policymakers, the practical lessons are clear: strengthen domestic refining where economically viable, improve energy infrastructure, diversify supply routes and suppliers, build strategic resilience, and protect consumers from abrupt price shocks without creating unsustainable fiscal burdens.

Nigeria's own position in the global oil market could provide opportunities during a disruption. But those opportunities are not guaranteed to translate into lower domestic costs or broad economic gains. That depends on domestic policy, investment and the capacity to convert oil production into reliable energy supply.

Hormuz therefore offers a lesson in sovereignty: possessing a resource is not the same as controlling the entire system through which that resource reaches consumers.

What Evidence Would Settle the Argument?

The competing claims from Tehran and Washington cannot be resolved through political declarations alone. Several indicators would help establish the real condition of the strait.

First, independently verified vessel-transit data would show whether traffic is returning to historical levels, which categories of ships are moving, and whether the recovery reflects normal passage through Hormuz or greater reliance on alternative routes.

Second, detailed records of maritime incidents would help test Rezaei's claim that Iranian forces have struck an average of five vessels every night over several months. Those records should identify dates, locations, vessel names where available, damage, casualties and the parties responsible.

Third, evidence about shipping costs would clarify whether commercial passage remains unusually expensive. Insurance premiums, crew compensation, freight rates and route diversions would help distinguish a normal operating environment from one in which ships move only under exceptional conditions.

Fourth, independent evidence would be needed to establish Rezaei's allegation that CENTCOM leadership and Emirati military personnel are directing smuggling operations. Vessel transfers alone would not prove that claim. Investigators would need to examine cargo origins, ownership, destinations, operational coordination and the legal status of the shipments.

Finally, the parties should make public the rules they are applying to commercial vessels and the legal basis for any restrictions or attacks. Transparency would not eliminate the political conflict, but it would make it harder for either side to use unverified claims as a substitute for evidence.

Conclusion: An Open Strait Is Not Necessarily a Secure Strait

Mohsen Rezaei's argument challenges a convenient assumption in geopolitical messaging: that if oil is moving, the Strait of Hormuz must be open in every meaningful sense.

That assumption is too simplistic. Commercial traffic can continue through a dangerous corridor, and exports can recover through alternative pipelines, ports and shipping arrangements even while the main waterway remains disrupted. The economic impact of insecurity is not measured solely by counting barrels.

But the opposite claim also requires scrutiny. Iran's ability to threaten shipping does not automatically establish that it controls the strait, and Rezaei's allegations about American-backed smuggling operations and nightly vessel attacks require independent verification.

The strongest conclusion is therefore more precise than either side's political slogan.

A waterway can be navigable without being secure, commercially active without being normal, and strategically contested without being under the exclusive control of any one actor.

For Washington, the test is whether it can sustain safe, predictable maritime access rather than simply declare the route open. For Tehran, the test is whether its claimed control can be demonstrated through verifiable facts—and whether the leverage it gains is worth the economic and military risks it creates.

For the rest of the world, the test is whether energy markets can distinguish political messaging from actual conditions at sea.

The Strait of Hormuz is not merely a passage through which oil travels. It is a demonstration of how geography, military power, commercial risk and international law intersect. When the security of that passage becomes a weapon, the consequences reach far beyond the Gulf.

And the crucial question is no longer simply whether the strait is open.

It is who can safely use it, under what conditions, at what cost—and who has the power to change those conditions.