No, the War Isn't Over

Iran's Real Nuclear Weapon Is Geography

Just days after nearly two weeks of missile strikes, air raids, and escalating rhetoric between Israel, Iran, and the United States, the guns have fallen silent—at least for now.

A ceasefire is technically in place, so naturally everyone's claiming victory. Trump called it "a victory for everybody," crediting his deal-making prowess. Ayatollah Khamenei also declared victory, claiming Iran had "defended the Islamic Republic against Zionist aggression" and delivered "a big slap in the face" to the United States. And Netanyahu called it a "historic victory," insisting that Israeli strikes had "thwarted Iran's nuclear project" and set it back years.

But despite the public victory laps, neither side seems particularly satisfied with this truce. Reports suggest Netanyahu was furious about the ceasefire terms and only backed down after a tense phone call with Trump. Meanwhile, a leaked U.S. intelligence assessment revealed the strikes fell well short of their goal. Two of Iran's key nuclear sites—possibly including the heavily fortified Fordow facility—were not destroyed. The damage likely delayed Iran's nuclear program by months, not the years Netanyahu claimed.

The Iranians aren't happy either. From Tehran's perspective, letting American bombers strike their nuclear infrastructure without serious retaliation would be political suicide. The regime is already under immense domestic pressure and can't afford to look weak.

So while the war may have slipped from the headlines, this feels less like peace and more like an intermission.

The 21-Mile Chokepoint That Haunts U.S. War Planners

But amid the flurry of missile barrages—and the faux victory chants echoing from all sides—something else happened, almost entirely overlooked by the media.

Right as tensions hit their peak, Iran's parliament voted to authorize shutting down the Strait of Hormuz, calling it payback for the nuclear strikes.

What really caught my eye, though, was the reaction from U.S. officials. They panicked. Not only did they publicly press Iran not to go through with it, but Secretary of State Marco Rubio even called on China to lean on Tehran to stand down.

Think about that for a second. The same administration that, until recently, was waging an all-out tariff war on China was suddenly asking—yes, asking—Beijing for help.

But Washington has good reason to sweat.

See, the Strait of Hormuz that Iran was threatening to close isn't just any waterway. It's a slender passage connecting the Persian Gulf to the Arabian Sea—and it happens to be the world's most critical oil chokepoint.

That’s because the Persian Gulf is bordered by five of the world’s top 10 oil-producing countries: Saudi Arabia, Iran, Iraq, UAE, and Kuwait. The Strait of Hormuz serves as their sole sea route to the open ocean... and global markets.

Oil tankers carrying oil from the top 5 exporters of the Organization of the Petroleum Exporting Countries (OPEC) must all navigate through the Strait. This accounts for roughly one-third of the world’s seaborne oil trade.

Iran has a hold on this tiny yet crucial area, spanning about 21 miles at its narrowest point, as shown on the map below.

If Iran, with its significant control over a portion of the coastline along the strait, were to block or disrupt traffic through this crucial artery, it would swiftly disrupt the global oil supply. This disruption would send oil prices soaring (triggering widespread economic ramifications and geopolitical instability around the world).

Now, some might argue that Iran has threatened to close the Strait plenty of times before and never actually done it. Fair point. But here's what's different this time: Iran's parliament actually took formal legislative action. That's only happened once before, back in July 2012. And while that vote didn't lead to an actual shutdown, we weren't in the middle of an active shooting war back then (albeit one interrupted by a fragile truce).

Then there are the people saying Iran would never actually do it because it would hurt their own economy. Which is funny, because these are often the same folks who spend all day telling us Iran is run by religious fanatics who don't care about logic or consequences.

Let me see if I understand: they’re unhinged enough to build a nuke… but too reasonable to use an economic one?

Look, I’m not saying it’s guaranteed to happen. But with tensions in the Middle East at their highest in years—and with Washington responding unusually vocally—the odds are higher than they’ve been in a long time.

And keep in mind, the U.S. government has previously acknowledged that Iran could block the Strait of Hormuz “for a period of time” before anything could be done to reopen it.

U.S. military strategists have played out tons of war games, and nobody has figured out a way to counter Iran's grip on the Strait.

When Oil Becomes a Weapon

This situation is a stark reminder that oil is not just a source of energy – it is also a weapon, one that has been carried into war many times already.

A blockade of the Strait of Hormuz would cut off nearly 20 million barrels of oil per day from world markets. That’s roughly 20% of the global market.

Calling it just a supply hiccup would be a huge understatement. It would be much more than that… a major oil supply shock.

And if you look back at history, they're called “oil shocks” for a good reason.

The 1973 oil shock, triggered by OPEC's embargo during the Yom Kippur War, caused a 4% decrease in global oil supply. Oil prices quadrupled from $3 to over $12 per barrel. Similarly, the 1979 oil shock, spurred by the Iranian Revolution, led to disruptions in Iran's oil production. This caused a 5% fall in global supply and prices more than doubling from $14 to over $35 per barrel.

This should give you an idea of what the absence of about 20% of the global oil supply from world markets could do to oil prices.

Now, it's true that the U.S. being the biggest oil producer has managed to reduce its dependence on foreign oil. But the oil market is still global, and Americans can't escape the ups and downs of oil prices worldwide.

And keep in mind that the U.S. still brings in roughly 6 million barrels of foreign oil every day. On top of that, America imports a ton of oil indirectly through manufactured goods. If foreign manufacturers have to shell out more for oil, you can bet they'll pass those extra costs on to us.

That means Iran could still send oil prices soaring for Americans by closing the Strait of Hormuz.

But there would be one big winner... oil stocks.

Now, I’m not hoping for more war or economic disaster. But pretending it’s not a real possibility—and ignoring the serious consequences, financial or otherwise—would be naive.

Regards,

Lau Vegys