On April 8, 2026, Iran and the United States signed a two-week ceasefire that required Tehran to guarantee safe passage through the Strait of Hormuz. The ink was barely dry before Iran began charging for that passage anyway, one US dollar per barrel, payable in bitcoin within seconds of assessment. The toll violated the ceasefire’s own terms, and Trump denounced it within a day.
The dispute resurfaced in a June 17 truce, its toll language vague enough that Iran read it as preserving the right to charge fees later. Trump pre-empted that reading, declaring there would be ‘NO TOLLS in the Hormuz Strait for 60 days during the Cease Fire Period, and there will be NO TOLLS after the 60 day period has expired, unless they are imposed by and for the United States of America.’ Iran struck a ship in the strait within the week, and by early July the two sides were exchanging fire again.
The precedent for the Hormuz closure worth remembering is the Suez. When President Gamal Nasser nationalized the canal in 1956, and Egypt closed it again in 1967, the shipping industry did not wait for Cairo to sort out its politics. It built bigger ships. The supertanker, designed to round the Cape of Good Hope rather than pay Egypt’s toll, became the industry standard within a decade. Suez reopened in 1975, but it never fully recovered its former leverage, because the world had spent nine years building an alternative to needing it.
Iran is watching that history repeat on a Gulf-wide scale. Saudi Arabia’s East-West pipeline, the Petroline, moves crude 745 miles to the Red Sea port of Yanbu at up to 7 million barrels a day with Riyadh weighing an expansion of 1 million to 2 million barrels a day more. The UAE’s Habshan-Fujairah pipeline bypassing the Strait itself is being fast-tracked to double its capacity to 3.6 million barrels a day by mid-2027, an acceleration ordered personally by Abu Dhabi’s crown prince.
Iraq is running two projects that converge on the same patch of desert. The Kirkuk-Baniyas line, a 500-mile route to Syria’s Mediterranean coast being revived by a Chevron-led consortium, was built in 1952 around the K-3 pumping/hub station in Haditha, shut during the Iran-Iraq war, and killed off by the 2003 invasion. The new Basra-Haditha pipeline runs to that same K-3 junction. It stretches 685 kilometers, cost US$4.6 billion to build, and carries a capacity of 2.25 million barrels a day, financed through an oil-for-infrastructure deal with China.
Both Iraqi lines fall inside seven Gulf pipeline schemes Goldman Sachs counted, estimated to carry 14 million barrels a day by 2028, against a pre-war Hormuz total of non-Iranian oil of roughly 18 to 18.5 million barrels a day. In chess, the pipeline build up would be a move that creates a situation called ‘check.’
However, none of this makes Hormuz irrelevant. Rystad Energy has called the buildout a hedge rather than a replacement. Fujairah’s port took Iranian drone fire even as Abu Dhabi announced its expansion, and a pipeline terminus is no harder to find than a tanker in open water. But that misses what Iran actually lost.
A chokepoint’s value lies in the credibility of the threat to close it, and in the absence of alternatives. Iran spent the first in a ceasefire-era toll grab Washington overruled within a day. It is watching the second condition evaporate at roughly two and a half years a project, across three Gulf states at once.
The Philippines has no strait to weaponize and no pipeline to build, but it carries a smaller version of Iraq’s exposure. The country sources roughly 98 percent of its crude from the Middle East, and every disruption in the Gulf moves directly into diesel prices and the inflation basket the Bangko Sentral ng Pilipinas (BSP) has spent two years trying to tame. Manila did not create this dependency.
It has, however, done remarkably little to mitigate against it. LNG terminal capacity has stalled for years on permitting delays and grid bottlenecks. Total dependence on imported fuel is the argument for building the best infrastructure on the planet, not an excuse for thin infrastructure.
Riyadh, Abu Dhabi, and Baghdad looked at their exposure and started pouring concrete. Manila has mostly waited for the next BSP meeting.
Chokepoints do not forgive procrastination. They only wait to see who blinks first, and this year, everyone with the capital to do something about it blinked at once, everyone except the country that still imports nearly all its fuel and calls the resulting inflation an external shock.
E-mail me at mangun@gmail.com. Follow me on Twitter @mangunonmarkets. PSE stock-market information and technical analysis provided by AAA Southeast Equities Inc.