Iran sets up 'toll booth' in Strait of Hormuz, as oil tankers detour via Larak Island for safe passage

Iran has created a de facto safe shipping corridor in the north of the Strait of Hormuz for select vessels, effectively monetizing control of a key oil transit chokepoint. This increases geopolitical risk and could push up shipping insurance and freight costs, threaten oil flows through the Strait and exert upward pressure on regional energy prices and trade flows.

Analysis

Iran has created a de facto safe shipping corridor in the north of the Strait of Hormuz for select vessels, effectively monetizing control of a key oil transit chokepoint. This increases geopolitical risk and could push up shipping insurance and freight costs, threaten oil flows through the Strait and exert upward pressure on regional energy prices and trade flows.