The Briefing
On Sunday, former US President Donald Trump announced the launch of ‘Project Freedom’—a US-led initiative to guide commercial ships, including oil tankers, through the Strait of Hormuz. The move comes as a response to what Trump described as a request from ‘neutral and innocent bystander’ nations whose vessels remain stranded in the strategically vital waterway. In a Truth Social post, Trump framed the operation as a humanitarian and economic necessity, citing low food and fuel supplies on board these ships. He warned that any interference would be met with a ‘forceful’ response.Iran’s military responded within 24 hours, issuing a stark warning through Ali Abdollahi, head of the Iranian armed forces’ unified command. Tehran declared that any foreign armed forces—particularly US troops—entering the strait would be attacked. The statement also instructed all commercial vessels to refrain from movement unless coordinated with Iranian authorities. The escalation threatens to collapse the fragile ceasefire in place since April 7, which had largely contained direct US-Iranian military confrontation despite ongoing proxy conflicts. The US Central Command (CENTCOM) confirmed involvement, deploying 15,000 military personnel, over 100 aircraft, and multiple warships and drones to support the operation. Admiral Brad Cooper, CENTCOM commander, framed the mission as ‘essential to regional security and the global economy,’ while emphasizing its defensive nature.
Why It Matters: The Bigger Picture
The Strait of Hormuz is the world’s most critical chokepoint for oil transit, with approximately 20% of global petroleum passing through it daily. Any disruption here triggers immediate global price surges—already evident with US petrol reaching $4.44 per gallon from under $3 pre-war levels. But the stakes extend beyond oil. This confrontation represents a systemic challenge to the post-World War II maritime order, codified in the United Nations Convention on the Law of the Sea (UNCLOS), which guarantees freedom of navigation in international waters. The US, as a non-signatory to UNCLOS, has historically invoked navigational rights under customary international law. However, Iran’s assertion of de facto control—even if contested—signals a rejection of this framework, potentially emboldening other coastal states to impose unilateral restrictions.
Washington’s involvement under a ‘humanitarian’ banner is a strategic sleight of hand. While framed as assistance to ‘neutral’ vessels, the operation is inherently political. It seeks to counter Iran’s blockade strategy, which has crippled Gulf shipping—except for Iranian vessels—since March. The move could be seen as an attempt to reassert US dominance in a region where China’s influence has grown through energy partnerships with Iran and Gulf states. Paradoxically, Trump’s initiative risks provoking the very instability he claims to mitigate, particularly if Iran interprets the US presence as a violation of the April ceasefire—a ceasefire that, despite its fragility, had kept direct hostilities in check for weeks.
Historical Context
This standoff echoes the 1980–1988 ‘Tanker War’ during the Iran-Iraq War, when both sides targeted each other’s oil shipments in the Gulf. The Reagan administration intervened in 1987–88 under Operation Earnest Will, reflagging Kuwaiti tankers and escorting them through the strait. That intervention, like Trump’s proposed ‘Project Freedom,’ was justified on grounds of protecting neutral shipping but ultimately served as a proxy for broader geopolitical interests. The key difference today is the rise of non-state actors and the proliferation of precision missiles, drones, and cyber capabilities, which lower the threshold for escalation. Unlike the Cold War era, where superpower brinkmanship was mediated through backchannel diplomacy, today’s crisis unfolds in the glare of social media and real-time satellite imagery, compressing decision-making cycles and increasing miscalculation risks.
Another parallel lies in the 2019 attacks on Saudi Aramco facilities at Abqaiq and Khurais, widely attributed to Iran. Those strikes demonstrated Iran’s ability to disrupt global energy markets with minimal direct attribution. Today, Iran’s ability to impose a near-total blockade without firing a shot—using only regulatory and paramilitary means—reveals a new form of ‘grey zone’ warfare, where economic coercion replaces kinetic confrontation. The US, in turn, is responding with a mixture of hard power (military deployment) and soft power (framing the intervention as humanitarian), a dual strategy reminiscent of the 1991 Gulf War’s ‘sanctuary’ narrative for Kuwaiti oil fields.
South Asia Impact
For South Asia, the Strait of Hormuz crisis arrives at a perilous economic moment. India, the world’s third-largest oil consumer, imports over 60% of its crude from Gulf states—most of it via the Strait of Hormuz. A prolonged disruption could push petrol prices above ₹120 per litre (from current levels of ₹98–110), triggering inflationary pressure in an economy already grappling with high unemployment and fiscal deficits. India’s strategic petroleum reserves—currently at 5.33 million tonnes—are sufficient for only about 10 days, making the country highly vulnerable to supply shocks. Moreover, Indian refiners have already reported delays in crude shipments, with Iranian oil purchases suspended since 2019 due to US sanctions. Any escalation that forces India to diversify imports rapidly—toward Russia or the US—could strain its foreign policy balancing act between Washington and Moscow.
Pakistan faces even greater exposure. Over 80% of Pakistan’s energy imports transit through the Gulf, with nearly all oil reaching the country via the Karachi port. A spike in oil prices would exacerbate Pakistan’s ongoing economic crisis, already marked by dwindling foreign reserves and an IMF program under strain. Islamabad’s diplomatic response will be constrained by its reliance on Gulf financial aid—particularly from Saudi Arabia and the UAE—while also maintaining a fragile détente with Iran. Any US-Iran confrontation in the strait could force Pakistan into a delicate balancing act: avoiding outright alignment with either side to preserve its economic lifelines. Meanwhile, Bangladesh, which imports 25% of its LNG from Qatar via the same route, could see retail gas prices surge by 15–20%, further destabilizing its fragile post-pandemic recovery. For all three countries, the crisis underscores the urgent need for diversified energy sources and strategic stockpiles.
What Happens Next
Projection 1: If Iran follows through on its threat to attack any US naval presence in the Strait of Hormuz, the April ceasefire will collapse, leading to a direct military confrontation between the US and Iran. This would likely trigger a ‘shadow war’ in the Gulf, with both sides targeting logistics chains, cyber networks, and proxy forces in Yemen, Syria, and Iraq. The US may escalate by deploying additional carrier strike groups or activating its ballistic missile defense systems in the region, while Iran could intensify drone and missile strikes on Gulf Cooperation Council (GCC) infrastructure, particularly in Saudi Arabia and the UAE. Such an escalation would force South Asian states to choose between supporting US-led sanctions (risking energy supply cuts) or maintaining neutrality (risking economic isolation).
Projection 2: If the US and Iran reach a tacit understanding to de-escalate—possibly through backchannel negotiations in Oman or Qatar—the crisis could be contained. In this scenario, Iran may agree to allow limited shipping under strict conditions, while the US reduces its naval footprint to ‘monitoring’ rather than ‘escorting.’ Such a compromise would prevent a full-blown conflict but would not resolve the underlying tensions. It would, however, embolden Iran to further consolidate control over the strait, setting a precedent for other littoral states. For South Asia, this would mean temporary relief from energy price shocks but long-term exposure to Iran’s evolving maritime policies, which could include new transit fees or cargo inspections.
Projection 3: A third, more destabilizing outcome involves a miscalculation leading to a localized but intense exchange—such as a US drone strike on an Iranian Revolutionary Guard Corps (IRGC) vessel or an Iranian missile attack on a US warship. Such an incident would likely trigger a rapid escalation, with both sides invoking self-defense under international law. The US may invoke the 2001 Authorization for Use of Military Force (AUMF) to justify expanded operations, while Iran could activate its asymmetric capabilities, including cyberattacks on Gulf energy infrastructure. South Asian states would face immediate energy shortages, supply chain disruptions, and potentially mass protests over rising fuel costs. India and Pakistan might activate emergency oil-sharing agreements, while Bangladesh could seek LNG shipments from Australia or the US as a stopgap.
