Shipping traffic through the Strait of Hormuz, a major maritime choke point for world energy trade, has been largely blocked by Iran since 28 February 2026, when the United States and Israel launched an air war against Iran and assassinated its supreme leader Ali Khamenei. Nearly two months later, the waterway that normally carries a fifth of the world's oil remains paralyzed—not because it's technically impossible to transit, but because the dual blockade between Washington and Tehran has made it commercially unviable.

Ship traffic in the Strait of Hormuz is still way below normal levels before the war when more than 100 vessels crossed daily. According to market data, WTI crude traded at $71.50 per barrel on Friday, up 0.6%, while Brent crude stood at $75.20 per barrel, up 0.5%. Reuters reported on shipping data showing only 5 ships crossed the Strait of Hormuz within 24 hours, including a tanker of Iranian oil products.

The disconnect between political announcements and physical reality has become the defining feature of this crisis. Bloomberg reported that transiting through the Strait of Hormuz has become virtually impossible for the first time in history, with Trump imposing a US blockade of Iran-linked ships while Tehran uses its "mosquito fleet" of gunboats to close down the waterway in response.

A Dual Blockade With No End in Sight

Following the failure of the Islamabad Talks, the US Navy itself began to blockade Iranian ports from 13 April, creating what is described as a "dual blockade", with the US Navy blockading Iran and Iran blockading the Gulf.

Iran's Revolutionary Guard said Wednesday that it seized two container ships as they tried to cross the strait "without authorization," according to the state news agency Tasnim.

Baker Hughes, the influential oilfield services firm, is assuming in its financial guidance that the U.S.-Iran conflict continues through the end of June and the strait may not be fully operational until the second half of the year, Chief Financial Officer Ahmed Moghal told investors on the company's first-quarter earnings call.

A Dallas Fed Energy survey of oil and gas executive found nearly 80% believe the strait will not reopen until August or later.

The economic toll continues to mount. An analyst estimated supply disruptions of around 13 million barrels of crude, condensates and natural gas liquids per day, warning that the cumulative effect has already breached above half a billion barrels.

Nigeria's Dangote Refinery Becomes an Unlikely Savior

While the Strait of Hormuz crisis dominates headlines, a quieter transformation is reshaping global refined product flows. As of February 2026, the Dangote refinery had hit full refining capacity.

The refinery recently reached its full nameplate capacity of 650,000 barrels per day, making it the world's largest single-train refinery, with March 2026 data showing the plant operating at near-peak throughput.

According to OilPrice.com, Nigeria is finally starting to fix a long-standing imbalance: a major crude exporter that couldn't meet its own fuel demand. Bloomberg reported that Nigeria's Dangote Petroleum Refinery and Petrochemicals has begun exporting fuel across Africa after reaching full production, shipping about a dozen cargoes to markets as far as Tanzania, representing about 456,000 tons of petroleum products—less than a fifth of the plant's monthly output.

The timing couldn't be better. In March 2026, several African governments, including South Africa, were reported to be in discussions with the Dangote Refinery for long‑term supply arrangements, with South Africa inquiring about a 12‑month contract for refined petroleum products amid global fuel market disruptions.

Vanguard News reported that Dangote's 650,000 barrels per day facility accounts for nearly half of Nigeria's installed capacity and stands as the largest single-train refinery globally. The refinery's emergence as a reliable supplier comes at a critical moment when global markets are starved for refined products due to the Hormuz disruption.

Washington Tightens the Screws on Iran's Oil Buyers

As diplomatic efforts stall, the Trump administration is escalating economic pressure. The U.S. Department of the Treasury's Office of Foreign Assets Control sanctioned China-based independent teapot refinery Hengli Petrochemical (Dalian) Refinery Co., Ltd., stating that China-based independent teapot refineries continue to play a vital role in sustaining Iran's oil economy, and Hengli is one of Iran's largest customers for crude oil and other petroleum products, having purchased billions of dollars' worth of Iranian petroleum.

The Treasury Department said Hengli Petrochemical's facility in the port city of Dalian has a processing capacity of roughly 400,000 barrels of crude oil per day, making it one of the biggest independent refineries in China, and that Hengli has received Iranian crude oil shipments since 2023 and has generated hundreds of millions of dollars in revenue for the Iranian military.

Additionally, OFAC is targeting approximately 40 shipping firms and vessels that operate as part of Iran's shadow fleet, whose transportation of petroleum and petrochemicals provides a financial lifeline to Iran's unstable regime. Reuters reported that China's Hengli Petrochemical has denied trade with Iran in response to the US sanctions.

The sanctions come at a delicate moment. The sanctions targeting Chinese companies come ahead of Trump's expected trip to Beijing scheduled for May, while China is heavily reliant on Iranian oil, which represented 80 percent to 90 percent of its imports before the U.S. and Israel started the war with Iran in February.

Market Reality Sets In

According to market data, Henry Hub Natural Gas traded at $3.25/MMBtu on Friday, down 2.4%, reflecting broader energy market volatility. The Brent crude oil price settled at $105.33 per barrel on April 25, 2026, rising modestly on the day and ending the week with a sharp gain of about 16 percent.

The EIA reported that the Dated Brent spot price increased to a premium of more than $25 per barrel compared with the front-month Brent futures contract in early April, with high Brent backwardation likely reflecting extreme market tightness in the very short term since the closure of the Strait of Hormuz.

The market structure tells the real story: spot prices commanding massive premiums over futures reflects a scramble for immediate barrels that no amount of political spin can disguise. The Strait of Hormuz shipping disruption demonstrated that unreliability is indistinguishable from closure, with the more consequential question being whether vessels will transit, and the answer, supported by hard maritime traffic data, is increasingly no.

As the crisis enters its third month, one thing has become clear: the global oil market has entered a new era where geopolitical risk isn't a temporary premium to be traded—it's the new baseline reality.