Strait of Hormuz remains effectively blocked as NATO, Iran tangle over shipping security

By willowt // 2026-05-22

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The Strait of Hormuz remains largely impassable months into the U.S.-Israeli war against Iran, with traffic at a fraction of pre-conflict levels.
NATO is considering escorting ships through the strait if it remains closed by early July, though the proposal lacks unanimous support.
Iran has launched a Bitcoin-based shipping insurance scheme to generate revenue and potentially establish a toll regime in the waterway.
At least eight undersea telecom cables traversing the strait face potential Iranian interference, threatening global internet infrastructure.
U.S.-Iran peace talks remain stalled, with both sides demanding conditions the other considers unacceptable.

The Strait of Hormuz has served as the world's most strategically vital energy chokepoint for decades, carrying approximately 20% of all seaborne oil trade before the current conflict. Prior to the U.S.-Israeli military campaign against Iran, roughly 3,000 vessels transited the 13-to-21-mile-wide passage monthly. By April 2026, that number had collapsed to just 191 ships. The waterway's closure represents the most severe disruption to global energy markets since the 1973 oil embargo, threatening economies across Europe, Asia, and North America that depend on Gulf petroleum exports.

Current conditions and NATO's dilemma

The Strait of Hormuz remains effectively closed despite a tentative ceasefire between the U.S. and Iran. Mines, recurring attacks, ship seizures, and insurers' refusal to provide coverage have kept most commercial vessels away from the critical waterway connecting the Persian Gulf to the Gulf of Oman. A senior NATO official told Bloomberg on Tuesday that the alliance is considering escorting ships through the strait if it remains closed by early July. The proposal faces internal opposition, with multiple European members hesitant to commit resources while the U.S. maintains its own blockade of Iranian ports. Even if NATO reaches consensus, it remains unclear how the alliance could establish control when the United States has failed to secure the waterway. This exposes a fundamental weakness in Western military planning: without naval superiority in the strait, neither the U.S. nor NATO can guarantee safe passage for commercial shipping.

Iran's financial gambit: Bitcoin insurance and internet cable fees

On Monday, Iran launched a cryptocurrency-based shipping insurance service through its Fars news agency. The government projects $10 billion in annual revenue from the scheme, which covers detention, inspection, and cargo confiscation but explicitly excludes weapons damage. Iranian state-linked media outlets Tasnim and Fars have also floated plans to charge U.S. technology companies—including Meta, Google, Amazon, and Microsoft—for using the eight undersea internet cables that traverse the strait. This proposal cites Article 34 of the UN Convention on the Law of the Sea, though experts express deep skepticism about its legal viability. The U.S. previously attempted to guarantee shipping insurance through a $40 billion reinsurance program backed by Chubb, AIG, and Berkshire Hathaway. That program failed to provide a single dollar of coverage because the precondition of US naval escort was not met.

Rising traffic amid persistent danger

Lloyd's List reported Monday that at least 54 vessels transited the strait last week—more than double the previous week's figure. Of these, 10 were linked to China, following an understanding between Beijing and Tehran on Iranian management protocols for the waterway. India is also preparing to send vessels through to load energy cargoes, according to Bloomberg. The modest traffic increase has been accompanied by renewed attacks. On May 14, a Honduras-flagged floating armory was seized and towed to Iranian waters. An Indian-flagged livestock barge sank off Oman following what authorities described as a "major explosion." The United Kingdom Maritime Trade Operations reports 49 incidents in the region, with 27 classified as attacks. Iranian military spokesman Ebrahim Zolfaghari warned this month that Tehran "will impose fees on internet cables." Experts note that actually cutting the cables would require overt action under constant US air patrols, making such a move highly risky.

Peace talks stall as both sides dig in

The White House rejected Iran's latest peace proposal as insufficient, with one unnamed official telling Axios: "We need some real, sturdy, and granular conversation. If that's not gonna happen, we will have a conversation through bombs." President Trump warned that Iran must "get moving, FAST, or there won't be anything left of them." Tehran insists any settlement must include cessation of hostilities against Iran and Hezbollah, U.S. military withdrawal from the region, lifting of all sanctions, and reparations for damages. The U.S. demands that Iran dismantle its nuclear program, surrender its enriched uranium stockpile, and lift all restrictions on Strait of Hormuz traffic. Iran denies seeking nuclear weapons.

A strategic impasse with global consequences

The continued closure of the Strait of Hormuz represents more than a regional dispute—it is a structural challenge to the post-World War II international order. Energy-dependent economies across Europe and Asia face the prospect of prolonged supply disruption, while the US-Iran standoff has exposed deep fractures within NATO itself. Without a negotiated settlement, the world faces two unpalatable scenarios: a NATO-led military intervention to forcibly reopen the waterway, or a permanent Iranian toll regime that transforms the strait from a free passage into a sovereign-controlled revenue generator. Either outcome would fundamentally alter the geopolitics of energy for a generation. Sources for this article include: RT.com TheGuardian.com NPR.org