The Strait of Hormuz, the narrow waterway through which approximately 20% of the world’s oil passes, sits at the absolute centre of the US-Iran war and its potential resolution. Iran’s insistence on retaining sovereignty over the strait is both a core demand in its ceasefire counter-proposal and a direct contradiction of the US’s principal war objective. How this issue is resolved — or whether it can be resolved at all — will likely determine the outcome of the entire diplomatic process.
Iran formally rejected the US 15-point ceasefire proposal on Wednesday, calling it unreasonable and favouring American interests. Tehran submitted its own five-point counter-plan, the most controversial element of which was the insistence on Iranian control over the Strait. The US plan had included conditions for reopening the strait, which has been effectively blockaded by Iran, causing global oil prices to surge and triggering an energy crisis of historical proportions.
The economic consequences of the Hormuz blockade have been severe. Oil prices have soared globally, contributing directly to Trump’s 36% approval rating — a record low — and fuelling a broader cost-of-living crisis in multiple countries. Around 59% of Americans believe the war has gone too far, with fuel costs a central grievance. The administration was reportedly considering seizing Iran’s Kharg Island, the source of 90% of Iran’s oil exports, specifically as leverage to reopen the Strait.
Iran made clear that any attempt to take Kharg Island or launch ground operations on Iranian soil would result in catastrophic consequences. Officials warned they would bomb their own territory to kill American soldiers rather than allow US forces to secure a foothold. Iran’s parliament speaker also warned of retaliatory strikes against any neighbouring country that facilitated such an operation, threatening to widen the conflict even further.
The Hormuz issue illustrates why this war is so difficult to end diplomatically. For Iran, control of the Strait represents strategic leverage and national sovereignty. For the US, reopening it is both an economic necessity and a war aim. Neither side can easily concede the point without suffering a significant political defeat. The resolution of this single issue may define the geopolitical order in the Gulf for decades to come.