Dear Friends,

A conflict arose between Israel and Iran. The United States intervened in support of Israel and launched attacks on Iran. In retaliation, Iran attacked US military bases in the Gulf region and closed the Strait of Hormuz, which was under its control.

Crude oil produced in Gulf nations reached the outside world via the Strait of Hormuz. Iran's closure of this strait created the potential for a global fuel shortage.

Because of this issue, the world markets were bleeded heavily and many have lost while few were used this opportunity to rebalance and invested a lot to build a great portfolio as well. 

Until the first half of February this year, the Strait of Hormuz had remained open and freely accessible to global shipping traffic.

Iran closed it as a consequence of the US entering the war.

The original objective of the US intervention shifted, centering instead on the need to get Iran to reopen the Strait of Hormuz. The US tried various measures to achieve this.
It threatened to destroy Iran's power infrastructure and water purification plants, and US naval forces blockaded Iranian ports.

None of these tactics worked.

Ultimately, following mediation by Pakistan, a ceasefire agreement was signed between the US and Iran.

The status of the Strait of Hormuz was a key element of this agreement.

"Ships from all nations may pass through the Strait of Hormuz, but they must follow the specific route we designate. There will be no guarantee of safety for any ship that uses a different route..." — Iran announced.

It further stated that it would consult with Oman and other Gulf nations regarding the administration and management of the strait.

The route designated by Iran is marked in green in the image. Initially, the US accepted the situation; however, after Iran closed the Strait of Hormuz, the US attempted to route vessels through the Sea of ​​Oman to quickly clear the ships that had become stranded.

Although the US claimed it was using this route merely to streamline shipping traffic, Iran was unwilling to believe this explanation. Iran viewed the move as a US attempt to undermine its authority over traffic in the Strait of Hormuz. The route the US intended to use is marked in red; Iran rejected this plan and launched indirect attacks on ships utilizing that path.

In response, US President Donald Trump declared the end of the ceasefire agreement with Iran and initiated fresh attacks against the country.

Iran retaliated by launching attacks on US military bases located in Gulf nations such as Qatar, Kuwait, and Bahrain.

The Strait of Hormuz is only 38 km wide at its narrowest point.

Within this space, the navigable channel established by Iran is less than 20 km wide; this narrow corridor lies at the heart of the entire dispute.

Ultimately, until February of this year, the Strait of Hormuz was not a point of contention.

Once a free and open trade route accessible to the US and all other nations, it has now become a subject of intense debate and a potential theater of war, with the issue escalating to the point where tolls are being proposed for ships using the route.

Let's see what would happen during this week end again?