Iran Controls Hormuz; Iraq, Pakistan Secure Energy Deals

Key Agreements Secured

Iraq and Pakistan have independently secured deals with Iran ensuring safe passage for energy tankers through the Strait of Hormuz. According to sources, Iraq has successfully navigated two crude carriers, each holding about 2 million barrels, while Pakistan is set to receive two tankers of Qatari liquefied natural gas.

These agreements come as Iran shifts its strategy from blocking the vital waterway to controlling it.

Shifting Dynamics in the Strait of Hormuz

Iran's new approach establishes the strait as a controlled corridor rather than a neutral transit route. This has drastically reduced maritime traffic to just 5% of its usual volume. The region normally supplies 20% of the world's crude oil and LNG, making the strait a critical chokepoint for global energy supplies.

Iran is now formalizing its control by requiring detailed documentation for each vessel to facilitate transit under naval supervision.

Economic and Market Impact

The disruption and heightened regional tensions have severely impacted global energy markets. Brent crude prices have surged by more than 50% since the conflict began. Similarly, LNG prices in Europe and Asia have jumped by approximately 35% to 50%, reflecting the significant supply risks and increased costs.

The situation continues to weigh heavily on Asian economies that are dependent on Gulf energy imports.

Summary and Outlook

These bilateral deals highlight Iran's growing leverage over regional energy flows. As more countries explore similar arrangements, it could normalize Iran's permanent control over the Strait of Hormuz, posing long-term risks to global energy security and price stability.

**FAQ**

Q: Were direct payments made to Iran for tanker passage?
A: Sources with knowledge of the matter stated that neither Iraq nor Pakistan made direct payments to Iran or its Islamic Revolutionary Guard Corps in relation to the transits.

Q: How has the situation impacted maritime traffic?
A: Before the conflict, about 3,000 vessels passed through Hormuz monthly. Traffic is now approximately 5% of that level, according to shipping data.

Source: Reuters