Strait of Hormuz Almost Completely Blockaded! Iran Makes Ceasefire Compensation Demand to US: Settling a 47-Year Feud

The flow of commercial ships through the Strait of Hormuz has plummeted by about 95% following the outbreak of conflict between the US, Israel, and Iran. From March 1 to 23, only 144 ships passed through, far below the daily average of 138 ships before the conflict. Iran’s new Supreme Leader’s military advisor, Mohsen Rezaei, proposed three conditions for a ceasefire on March 23, emphasizing that this dispute stems from the Islamic Revolution 47 years ago and must be “settled once and for all.”
(Background: Iran threatens to push oil prices above $200 and attacks two ships in the Strait of Hormuz)
(Additional context: If not through the Strait of Hormuz, can oil really get out? Are there alternatives?)

The world’s most critical oil choke point is now nearly paralyzed. According to market data cited by Xinhua News Agency, from March 1 to 23, only 144 ships transited the Strait of Hormuz, averaging less than 7 ships per day. Before the conflict, the strait saw an average of 138 ships daily, meaning traffic has dropped by approximately 95%.

This strait accounts for about a quarter of global maritime oil transportation and one-fifth of LNG natural gas shipments. According to the U.S. Energy Information Administration (EIA), around 20 million barrels of oil pass through daily in 2024, but most ships are now avoiding the route.

Of the 144 ships, 91 are oil and gas vessels

Among the 144 ships passing this month, 91 are oil and natural gas vessels, but they are not passing smoothly—they are rerouting or turning away.

LNG ships originally headed to Europe have rerouted to Asian markets due to higher spot prices in Asia. The supply and demand structure has rapidly reorganized over a few weeks, increasing energy supply pressure on Europe.

Most ships still passing through the strait choose the northern route, in waters north of Larak Island, Iran. Al Jazeera and several UK shipping media confirmed that over 20 ships have chosen this route, which is monitored and allowed passage by Iranian forces.

Iran currently employs a “permit system,” with Chinese, Indian, and Pakistani ships considered friendly and more likely to be allowed through. Ships from other countries are less fortunate. As of March 12, Iran has attacked 21 ships.

JPMorgan analysts state that in observable oil transportation, Iranian crude oil accounts for up to 98%. In early March, the daily transportation volume was about 1.3 million barrels, meaning nearly all oil flowing through the strait is Iranian.

Trump’s 48-hour ultimatum

On March 23, tensions escalated again. Trump initially set a 48-hour final warning: if Iran does not open the Strait of Hormuz, the U.S. will bomb Iranian power plants. Iran immediately responded with threats, warning that if power plants are attacked, mines will be laid across “the entire Persian Gulf.”

Trump then announced a five-day delay, citing “very good and productive talks.” Iran’s foreign ministry directly denied any dialogue with Washington, saying there has been no communication at all. Both sides’ statements are completely contradictory.

On the same day, Iran’s state television broadcast a declaration by Mohsen Rezaei. Rezaei, a former IRGC commander, was appointed as military advisor by the new Supreme Leader Mojtaba Khamenei on March 16, a highly influential position.

He laid out three tough conditions for a ceasefire:

• Condition one: Iran receives full compensation
• Condition two: All U.S. economic sanctions on Iran are fully lifted
• Condition three: Iran obtains international legal guarantees that the U.S. will not interfere in Iran’s affairs

Rezaei also said that the Iran-U.S. dispute is not just about this conflict or the U.S.-Israel attack on Iran last June, but has been ongoing since the Islamic Revolution in 1979, lasting 47 years, and must be “settled once and for all.”