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3w ago

Iran’s Hormuz Leverage Shakes Energy Markets as Its Economy Buckles

Iranian leaders cast the crisis as an economic battlefield.

Vehicles drive past banners showing portraits of the school children who were killed during a strike on a school in southern town of Minab on Feb. 28, at Tajrish square in northern Tehran, Iran, Sunday, May 10, 2026. (AP Photo/Vahid Salemi)
People walk along a sidewalk in northern Tehran, Iran, Sunday, May 10, 2026. (AP Photo/Vahid Salemi)
A motorist rides a scooter along a street near a billboard on the facade of a building depicting the Strait of Hormuz with a caption in Persian reading "Forever in Iran's Hand", at Vanak Square in Tehran on May 6, 2026. The United States and Pakistan, a key mediator in the Middle East war, expressed new hope of talks leading to a peace deal with Iran on May 6, after President Donald Trump halted a plan to guide ships through the Strait of Hormuz. (Photo by AFP via Getty Images) /
A woman looks at the window display a women's clothing shop in northern Tehran, Iran, Sunday, May 10, 2026. (AP Photo/Vahid Salemi)

Overview

  • Iran controls the Strait of Hormuz, a narrow route for much of the world’s oil, and the war has tightened shipments and raised costs.
  • Inside the country, annual inflation is 53.7% with food up about 115% as the IMF projects roughly a six‑percentage‑point drop in GDP.
  • The rial has lost more than half its value and families face steep price jumps on basics such as meat, rice and eggs.
  • The U.S. naval blockade is choking Gulf trade, and a leading economist estimates more than 90% of Iran’s commerce moves through southern ports.
  • Global players are seeking workarounds, with the UAE saying it will quit OPEC, talk of pipelines to bypass the strait, and faster shifts to solar and batteries reported by Ember.