The Stalemate With Iran Is Not Sustainable

Foreign Affairs | Richard Haass, Carolyn Kissane

Iran and the United States have engaged in a six-month war that has largely closed the Strait of Hormuz, blocking twenty percent of global liquefied natural gas transit and a higher share of oil trade. While this conflict has triggered global energy shortages and price increases, both nations have avoided devastating attacks on critical Gulf energy infrastructure.

This precarious operational equilibrium has allowed international markets to temporarily stabilize despite severe supply disruptions. The current stalemate is highly unstable. Although Washington and Tehran have restricted their targeting to prevent total economic collapse, the underlying geopolitical tensions remain unresolved. A comprehensive diplomatic strategy is urgently required to end the hostilities before an accidental miscalculation triggers catastrophic infrastructure damage. Ultimately, the prolonged closure of this vital maritime chokepoint threatens to exhaust global energy buffers, disrupt international supply chains, and trigger a direct, highly destructive military confrontation between the primary combatants.

Comment

The closure of the Strait of Hormuz exposes the severe physical limitations of regional bypass infrastructure. While Saudi Arabia's Abqaiq-Yanbu Pipeline offers an alternative overland route to the Red Sea, its maximum operational capacity of five million barrels per day cannot absorb the eighteen million barrels that normally transit the strait daily. This massive deficit forces global supply chains to rely on prolonged maritime rerouting around the Cape of Good Hope. Such extended voyages dramatically increase tanker turnaround times and deplete the global pool of available very large crude carriers.

This logistical bottleneck is further compounded by the lack of redundant liquefied natural gas infrastructure. Unlike crude oil, Qatar's massive liquefied natural gas exports cannot be diverted via overland pipelines, leaving Asian and European importers entirely dependent on dwindling domestic stockpiles. Consequently, the energy security of major importers like Japan and Germany depends on securing alternative shipments via the terminal at Wilhelmshaven or the Gate terminal in Rotterdam.

Strategic Question for Discussion

If the blockade of the Strait of Hormuz becomes permanent, what happens to the operational viability of European LNG terminals like Wilhelmshaven once global tanker turnaround times around the Cape of Good Hope exceed current maritime logistics buffers?

The trajectory indicates that prolonged circumnavigation of the Cape of Good Hope would trigger a severe deficit in shipping capacity, rendering terminals like Wilhelmshaven underutilised due to a lack of available hulls. My assessment is that the resulting surge in charter rates would price out European buyers, forcing a reliance on rationed domestic reserves rather than continuous maritime supply. Consequently, the physical bottleneck shifts from regasification capacity to global tanker availability.

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