The US is gaining control over the Strait of Hormuz, a critical waterway, while Iran's influence over the region is diminishing, according to analysts. The US Navy has been patrolling the strait, resulting in more than 80% of liquid transits over the past fortnight taking the Omani route. This UN-authorized shipping channel is opposed by Iran, which has attacked several vessels attempting to traverse the waterway via the north coast of Oman.

Despite the risks, most ships have chosen to ignore Iran's demands, crossing the strait under the protection of US naval forces. "It increasingly looks like Iran has at least partially lost control of the strait," Homayoun Falakshahi, head of crude oil analysis at Kpler, told CNN. Notably, Kuwait, Saudi Arabia and the UAE are using VLCCs to move oil through the Strait of Hormuz before transferring it to customer tankers outside the danger zone. To avoid Iranian attacks, some tankers have switched off transponders for weeks, creating "dark traffic" that can evade traditional tracking systems.

Shipping traffic through the Omani route has surged from almost nothing a month ago, while reduced traffic on Iran's preferred route has weakened its ability to collect toll revenue from ships passing through the strait. "Iran's request to collect tolls is something that most Middle East folks don't want to do and haven't been doing," said Dan Pickering, founder and chief investment officer at Pickering Energy Partners. Pickering said that Iran's aim appears to be "deterrence" rather than control, suggesting "they were never completely in control to start with" but still retain the ability to deter.

Hormuz Talks Remain Uncertain as Crude Soars

The remarks from the analyst come on the heels of Energy Secretary Chris Wright highlighting a significant increase in the average daily oil flow through the Strait of Hormuz earlier this month. The increase was attributed to the coordinated efforts of the US military and Gulf allies, with the seven-day average rising to nearly 9 million barrels per day. The newly upgraded pipelines and export facilities are moving 5–7 million barrels of oil per day out of the region, bringing total oil flows out of the region to about 15 million barrels per day.

While President Donald Trump claimed the US has "total control" of the Strait of Hormuz, continued Iranian attacks and depressed oil flows suggest neither the US nor Iran has full control over the strategic waterway yet, as per analysts. A 60-day US-Iran memorandum of understanding expired Monday without a broader peace deal. The agreement was intended to halt military operations and open negotiations over Iran's nuclear program and US sanctions.

Meanwhile, Oman and Iran are negotiating to restore freedom of navigation through the strait without US involvement, a development that could complicate the situation and displease Trump. Notably, the President also threatened to bomb Oman if it "gets in the way" of his administration's talks with Iran, reported Fox News. At the time of writing, Brent crude oil futures were trading 0.99% higher at $91.92 per barrel, while WTI crude futures were trading 1.08% higher at $84.97 per barrel.

Shipping traffic through the Strait of Hormuz slowed further over the weekend, following tanker attacks and a lack of progress in US-Iran peace talks. Daily transits stood at nine vessels, down from an August average of 12 ships and far below the 130-plus ships that crossed daily before the US-Israel war on Iran began in February.

The United Kingdom Maritime Trade Operations Center (UKMTO) reported an incident on Tuesday when a vessel was struck by an unknown projectile in the waterway. The impact caused damage to the starboard side and resulted in a crew casualty, though there were no reports of environmental damage. Abu Dhabi National Oil Company previously reported that two of its vessels were attacked on Thursday, with the UAE government blaming Iran.

Diplomatic Stalemate

Negotiations to build upon a June agreement to end the conflict have stalled. President Donald Trump rejected an extension to the 60-day ceasefire following the Memorandum of Understanding signed by Washington and Tehran. Iranian Foreign Minister Seyed Abbas Araghchi blamed Israeli Prime Minister Benjamin Netanyahu for derailing the negotiations.

Iran’s Secretary of the Supreme National Security Council, Mohsen Rezaee, pushed back against Trump’s claim that the Strait of Hormuz was U.S. territory. In a post on X, Rezaee stated that "the gap between America’s inability to reopen the Strait of Hormuz and its claim to own it" was "greater than the 7,000-mile distance" between Washington DC and the waterway. He touted a "post-American order in the Persian Gulf."

Rezaee had earlier outlined conditions for reopening the strait, stating it would reopen only if the US ends the war and blockade, releases frozen assets, and agrees to a region-wide ceasefire. Rep. Don Bacon (R-NE) acknowledged that Trump could have handled the Iran war communication better, citing the impact on affordability in the US.

Market Impact

High energy costs continued to affect consumers. The national average price of gas surged to $4.0654/gallon, according to the American Automobile Association. Prices remained above $5/gallon on average in states like California, Washington and Hawaii.

On the oil front, prices surged amid escalating tensions. West Texas Intermediate crude stood at $85.58/bbl, while Brent crude surged past $90 to $91.63/bbl. US Energy Secretary Chris Wright stated that the Iran war was not the only factor driving high prices, blaming clean-energy policies implemented under former President Joe Biden.

What the Numbers Show

The contraction in commercial throughput relative to historical baselines is severe. The table below illustrates the scale of the decline in daily vessel transits through the strait.

With daily traffic at nine vessels compared to a pre-conflict baseline of over 130, current flow represents less than 7% of normal capacity. This divergence highlights the operational impact of the blockade and security risks on global supply chains dependent on the strait.