Who gets through Hormuz? How Iran’s passage regime is splitting Asia

Why it matters now

On 13 November Iran’s Revolutionary Guards navy said, according to state media, that a tanker carrying liquefied natural gas had struck a naval mine and suffered an explosion in the Strait of Hormuz while using what it called an “unauthorised and dangerous route”, Reuters reported. No details of the vessel were immediately available. It was the third such claim in less than a week: the Guards said three tankers had been hit on 8 November for using “unauthorised routes”, and on 12 November Iranian media reported that four oil tankers had been struck after entering areas Tehran considers restricted.

The strikes come as traffic recovers. October was the busiest month for Gulf LNG exports since the war began on 28 February, with 31 laden LNG tankers leaving the strait, according to S&P Global Energy data cited by Reuters. Brent crude fell below $90 a barrel on 10 November for the first time since late August, more than 20 per cent below its 30 October high of $118. Yet October was also the worst month of the war for attacks on shipping: the Washington Institute for Near East Policy counted 37 vessels hit, and at least 10 more in the first ten days of November.

On 3 November the Iranian lawmaker Hayat-Moghaddam, deputy chairman of the parliament’s National Security and Foreign Policy Committee, told the Iranian Students’ News Agency: “We have currently exempted India, China, Iraq and Qatar from transit restrictions in the Strait of Hormuz. Ships from these countries pass freely, and the Americans do not intercept them either.” Silk Road could not independently verify the second claim. The first describes a strait that is neither open nor closed, but managed – and Asia, which buys most of what flows through it, is being sorted.

Background

More than 80 per cent of the crude oil and LNG that crossed Hormuz in 2024 went to Asia, and Japan drew 95 per cent of its crude imports from the Gulf, according to Jean-Loup Samaan of the Middle East Institute at the National University of Singapore, writing in War on the Rocks. South Korea relied on Hormuz for 61 per cent of its crude imports and 54 per cent of its naphtha in 2025, Reuters reported.

The US–Israeli war on Iran turned the waterway into a contested zone. By spring Iran was letting through vessels linked to governments it regarded as friendly. Beijing “negotiated its own passage arrangements with Tehran”, Samaan writes, while Thailand, Malaysia and the Philippines each reached separate arrangements, according to Ramkishen Rajan of the Lee Kuan Yew School of Public Policy. Tehran has since given the system an institution, the Persian Gulf Strait Authority, which requires shipowners to apply for authorisation with details of ownership, insurance, crew and intended route. Iran has published no tariff, but Lloyd’s List has reported payments of up to $2m per transit, settled in Chinese yuan, AGBI reported in May.

The US Navy maintains a blockade of Iranian ports, and the Treasury’s Office of Foreign Assets Control has warned “US and non-US persons” of the sanctions risks of paying Iran for safe passage. “These risks exist regardless of payment method,” it said, Reuters reported on 1 May. Tehran says the change is permanent. “Everyone should know that the administration of the Strait of Hormuz will never go back to the way it was before the war,” the parliament speaker, Mohammad Bagher Ghalibaf, said in June after talks with the United States in Switzerland. “Of course, international regulations will be observed, but Iran will administer the Strait of Hormuz.”

Two gatekeepers, one strait

What has emerged is a waterway with two rival managers. One is Iran’s permit system, enforced by strikes on ships that use what the Guards call unauthorised routes. The other is American: Gulf exporters have moved cargoes in convoys close to Oman’s coast under US Navy protection, and through ship-to-ship transfers, the Reuters energy columnist Ron Bousso notes. A shipowner’s choice of lane has become a choice of risk – Iranian fire on one side, US sanctions on the other.

Crude shipments through Hormuz have averaged 10.5m barrels a day since the start of October, against 13.5m before the war, according to Kpler data cited by Bousso, while total Gulf crude exports, including bypass routes, have averaged 16.7m b/d, against 17m. Other estimates are lower: an analysis in Asia Times put October’s Gulf crude and condensate exports at about 86 per cent of pre-war levels. By Silk Road’s arithmetic from the Kpler figures, more than 6m b/d now leaves the Gulf by routes that avoid the strait, against about 3.5m b/d before the war. The oil is getting out, at a price: Bousso puts freight and insurance costs at about ten times pre-war levels, and charter rates are above $1m a day, Reuters reported on 11 November.

Gas tells a more complicated story. Qatar, whose ships pass free of charge under Tehran’s list, exported about 2.7m tonnes of LNG in October against some 6.2m tonnes in February, according to Kpler data cited by Oilprice.com, and S&P Global Energy puts Qatari LNG traffic at just over 30 per cent of pre-war levels. The United Arab Emirates, which is not on the list, has restored its LNG traffic to pre-war levels, according to S&P. An Iranian exemption, in other words, is neither necessary nor sufficient. What moves depends as much on insurers, crews, mines and naval cover as on a nod from Tehran – which is why the reported 13 November mine strike on an LNG carrier matters well beyond the vessel concerned.

Asia, sorted by alignment

India’s exemption is meant to ease Iran’s imports of Indian medicines and China’s to secure Beijing’s political support, according to accounts of Hayat-Moghaddam’s remarks; Indian and Chinese ships pay transit fees, Qatari vessels do not, and Iraq’s terms were not stated. “We are making deals, and each exemption has a specific reason,” he said, as reported by Shafaq News. The list “differentiates among Asian buyers by political alignment rather than need”, Bilal Habib Qazi of the Institute of Regional Studies in Islamabad argued in Asia Times.

China’s crude imports rose to a seven-month high of nearly 42m tonnes in October on a recovery in shipments from the Gulf, led by Iraqi cargoes, though still 13 per cent lower than a year earlier, Bloomberg reported on 10 November. Beijing has also shown it will contest US secondary sanctions: on 2 May the commerce ministry issued its first blocking order, declaring that US sanctions on five Chinese petrochemical companies over Iranian oil “shall not be recognized, enforced, or complied with”, according to the law firm King & Wood Mallesons. The order covers oil purchases rather than transit fees, but it gives Chinese firms a political cushion that Japanese and South Korean companies lack.

Japan and South Korea, both US allies and absent from Tehran’s list, have taken the long way round. In April Seoul said it had secured 273m barrels of crude from the Middle East and Kazakhstan through the end of the year via routes outside the strait, including Saudi priority on 200m barrels from June, Reuters reported. Between April and July Japan’s imports of Saudi crude fell 41.2 per cent year on year, against 21 per cent for South Korea, Korea JoongAng Daily reported, and Japan has released about 90m barrels from its strategic reserves. “The days when we could simply buy resources as long as the price was right are over,” South Korea’s trade and industry minister, Kim Jung-kwan, wrote in October.

Nor has the rest of Asia bargained as a bloc. “Southeast Asian governments are failing to respond as a bloc,” Rajan wrote for the Australian Strategic Policy Institute in May. Singapore’s position, he noted, is that “passage through an international strait is not supposed to depend on permission, bargaining or payment”. India launched its own naval escort operation, Urja Suraksha, for Indian-flagged ships in the Gulf of Oman, while China “has shown no interest in joining any coalition”, Samaan observes.

The price of the long way round

For Japanese and Korean refiners, the Red Sea detour is turning from an emergency measure into a habit. In July S&P Global reported that refiners in both countries “plan to utilize the Red Sea maritime passage” to buy Saudi crude “even if the US-Iran war ends”. That route has its own hazards: Reuters reported on 11 November that the Houthis had fired missiles at Saudi cities overnight, according to the Saudi-led coalition.

China and India face the mirror-image dilemma. Paying Tehran keeps their cargoes moving and, if the reports of yuan settlement are accurate, gives the renminbi a small role in policing one of the world’s main oil arteries. But it ties their shipping to an Iranian administration of the strait that Washington treats as sanctionable, and leaves them exposed should the US decide to make an example of a toll payer. Gulf exporters, meanwhile, must accept that Tehran now has a say over who may lift their oil and gas – awkward for producers whose cargoes through the strait go overwhelmingly to Asia.

The bill reaches consumers too. Bousso argues that elevated shipping and insurance costs “could help put a floor under global oil prices” even as Brent eases, and Rystad Energy has warned that this winter in the northern hemisphere will be extremely uncertain in terms of energy security, Oilprice.com reported. For Asia’s importers, the new order works like a standing surcharge on every cargo.

What to watch

• The diplomatic track. President Donald Trump said on 9 November he would hold off on new military action after appeals from Gulf allies, and Qatar and Pakistan are mediating, but Mohsen Rezaei, a senior Iranian security official, has said no negotiations are under way (Reuters). A settlement that leaves Iran administering the strait would entrench the two-tier system.
• Enforcement on both lanes. Whether the Guards keep striking ships on “unauthorised routes”, and whether the US Treasury names shipowners or insurers for paying transit fees – a direct test for Chinese and Indian operators.
• Winter gas. With Qatari LNG shipments still well under half of pre-war levels, watch whether the reported 13 November mine strike deters insurers and owners of LNG carriers from using the strait.
• Tokyo and Seoul’s next step. Whether Japan or South Korea seeks its own terms from Tehran, leans on US-escorted convoys or makes the Red Sea route permanent.

Bottom line

The Strait of Hormuz is reopening, but not as a commons. Iran is turning it into a permit system priced in political alignment, while the United States guards a parallel lane and threatens sanctions against anyone who pays Tehran. Asia, which buys the bulk of what passes through, has answered with separate bargains rather than collective weight: China and India keep direct access at the cost of entanglement, while Japan and South Korea depend on a more exposed Red Sea supply chain that their refiners plan to keep even after the war. Unless a settlement restores unconditional transit, the Gulf’s energy relationship with Asia will increasingly be shaped by who holds the keys to the strait – and on what terms.

Sources

1. Reuters (via ThePrint), “Iran says tanker carrying LNG hit mine, suffered explosion in Hormuz”, 13 November 2026.
2. Reuters (via BOE Report), “Hormuz traffic is up. So are the attacks”, 11 November 2026.
3. Ron Bousso, Reuters (via Cyprus Mail), “Gulf oil faces costly new reality as Iran war drags on”, 11 November 2026.
4. Bernama–Anadolu, “Iran Exempts Ships From India, China, Iraq, Qatar From Hormuz Transit Restrictions: Lawmaker”, 4 November 2026.
5. Shafaq News, “Iran exempts Iraq, three countries from Hormuz restrictions”, 3 November 2026.
6. Jean-Loup Samaan, War on the Rocks, “The Missing Navies: The Hormuz Crisis and the Limits of America’s Indo-Pacific Partnerships”, 13 May 2026.
7. Reuters (via Baird Maritime), “South Korea secures 273m barrels of crude oil through end of year”, 15 April 2026.
8. Ramkishen Rajan, The Strategist (ASPI), “No solidarity: Southeast Asian countries split as each seeks Iranian oil”, 13 May 2026.
9. AGBI, “Iran formalises Hormuz ship approvals and transit tolls”, May 2026.
10. Reuters (via The Times of Israel), “US warns shippers that paying Iran to traverse Hormuz may incur sanctions”, 1 May 2026.
11. ANI (via Times of Oman), “Hormuz will never go back to its pre-war status: Iran’s Parliament Speaker”, 23 June 2026.
12. Oilprice.com, “LNG Traffic Through Hormuz Hits Highest Level Since Iran War Began”, 10 November 2026.
13. Bilal Habib Qazi, Asia Times, “Iran’s Hormuz toll regime to punish weakened Trump’s Asian allies”, 6 November 2026.
14. Bloomberg (via Energy Connects), “China Oil Imports Rebound as More Crude Flows From Gulf”, 10 November 2026.
15. King & Wood Mallesons, “China issues its first blocking order against US sanctions”, 15 May 2026.
16. Korea JoongAng Daily, “Korea cushions Iran war oil supply shock as Japan’s imports plunge”, 21 October 2026.
17. S&P Global Energy, “South Korean, Japanese refiners to keep Red Sea route for Saudi crude”, 16 July 2026.

Photo: Qeshm Island in the Strait of Hormuz, seen from space — NASA (via pingnews.com), Public Domain Mark 1.0, via Flickr.