Former U.S. Defense Secretary Leon Panetta: Iran Still Controls the Strait of Hormuz, Maritime Safety and Commercial Shipping Have Not Returned to Normal
Former U.S. Defense Secretary Leon Panetta stated that Iran still has substantial control over the Strait of Hormuz, and maritime safety and commercial shipping have not returned to normal.
Public shipping data indicates that only 7 cargo ships crossed the Strait of Hormuz on Thursday, down from 17 the previous day and below the average of 15 ships per day over the past 10 days; this includes 2 medium-range oil tankers, 1 very large liquefied gas carrier, 1 Ultramax bulk carrier, 1 medium-sized oil tanker, and 2 chemical tankers.
Mohsen Rezaei, Secretary of Iran's Supreme National Security Council, stated that Tehran is formulating a list of conditions for reopening the strait and is discussing a designated route through Iranian and Omani waters; the conditions proposed by Iran have included lifting the U.S. blockade on Iranian ports, compensation, and the removal of sanctions.
Iran previously demanded that vessels not pass without its permission, leading most shipping companies to avoid the strait even after U.S. military claims that the route was open and mines had been cleared. Vessel tracking agencies estimate that the current actual shipping volume is only 5% to 15% of normal levels.
The U.S. Central Command stated that it has assisted 1,500 commercial vessels and approximately 750 million barrels of crude oil to pass through the strait, and that U.S. forces have cleared mines previously laid by the Iranian Revolutionary Guard; however, Iran continues to link navigation arrangements, passage conditions, and control of the strait to the U.S. blockade of Iranian ports and the state of war.
In market mechanisms, Iran compresses effective capacity through security threats, navigation permits, and potential passage arrangements, causing shipping companies, tanker charterers, and traders to reduce crossings due to war risks, detours, and attack risks; alternative routes, floating storage, non-strait export pipelines, and regional crude oil suppliers are taking on overflow logistics and spot demand. Oil-producing countries, refiners, and liquefied natural gas buyers reliant on Persian Gulf exports are under pressure, while crude oil, refined oil, liquefied gas, oil shipping rates, and war risk premiums are driven by events to gain risk premiums.
Source: Public Information
ABAB AI Insight
Leon Panetta has long focused on Middle Eastern maritime passages and asymmetric deterrence within the defense system: he served as CIA Director and U.S. Defense Secretary, and in 2012 he publicly warned multiple times that if Iran attempted to block the Strait of Hormuz, it would trigger severe military confrontation. Iran has historically not needed to permanently block the strait to exert influence: during the "Tanker War" of the 1980s, attacks on tankers and offshore facilities forced the U.S. to initiate escort operations; incidents of tanker attacks and seizures in the Gulf in 2019 also quickly raised shipping risks and crude oil prices. The current low shipping volume indicates that control of the strait does not depend on whether it is officially declared "closed," but rather on whether insurance companies, shipowners, and charterers are willing to bear the tail losses from an attack.
Iran's capital and negotiation path is not simply about blocking oil, but rather turning international shipping into an exchangeable asset: using vessel permits, designated routes, mine clearance, tolls, and security commitments as nodes to exchange for sanctions relief, lifting of port blockades, and political negotiation leverage. The temporary route being discussed between Iran and Oman involves Iranian and Omani waters and a designated central route; this means that once arrangements are finalized, route selection, vessel identity verification, and cost distribution may all be incorporated into a bilateral framework between Iran and Oman. For Tehran, low-cost missiles, mines, speedboats, and legal-administrative permits can leverage high-value global energy and shipping flows.
Historically, the commonality between the Hormuz crisis and disruptions in the Suez Canal and Houthi attacks in the Red Sea is that the shipping market first shrinks its risk tolerance, which then manifests as spot delivery and terminal price shocks; the difference is that the Strait of Hormuz connects the oil-producing region of the Persian Gulf to the global market, with limited alternative routes. The Red Sea crisis can be broadly redirected around the Cape of Good Hope, at the cost of time and fuel; effective alternatives for Hormuz rely more on Saudi east-west pipelines, UAE Fujairah export facilities, and limited regional storage capacity. Therefore, the current phase represents a transition from "military threats" to "route rationing and logistical bottlenecks," where a small recovery in passage is insufficient to restore market confidence in continuous supply.
Essentially, this is a transfer of pricing power: an international waterway can legally be claimed as an open channel, but in risk asset pricing, the actual pricing power is held by those who can increase the probability of incidents, determine navigation permits, or influence insurance availability. Oil prices and freight rates are determined by marginal deliverable barrels, not by theoretical daily production capacity; when shipowners reduce crossings, cargo owners delay shipments, and insurance rates rise, actual supply elasticity decreases, giving sellers and alternative capacities higher pricing power. Even if the U.S. can provide escort for some vessels, it cannot replace commercial insurance, crew risk preferences, and traders' pricing on uncertain delivery windows. nbcnews+1
ABAB News · Cognitive Laws
Those who can block the waterway do not necessarily own it.
Safety is not a cost; the absence of safety is the cost.
Paper capacity is not priced; marginal delivery capability is priced.