The Strait of Hormuz Was Iran's Ace in the Hole

Why Tehran's most powerful weapon could prove to be a one-time play 

The Strait of Hormuz was Iran’s ace in the hole. It is perhaps the most strategic point for the world’s most strategic commodity; so, closing it created global repercussions. It was always a card we knew Iran held. It was always a card we knew the terrorist regime could, and likely would, play. The problem that has occurred for the world when Iran played the card is clear; the problem for Iran when they played the card is less so. However, of the two, Iran’s problem is likely the longer-lasting.

For some time, Iran was looking for additional leverage that would allow it to be an untouchable pariah state and pursue its terrorist aims undisturbed. North Korea was its model: insulated from all, including its patrons (China and Russia), and free to be as reprehensible as it desires.

But Iran always had leverage North Korea didn’t: oil and access to a major channel through which oil flowed. Iran could hold the world hostage if it chose. So, the world and the Middle East region absorbed the bloody cost of Iran’s terrorism in return for its oil, and even more, for Iran allowing oil to flow unimpeded.

Then Iran’s clients went too far—Bashar al-Assad in Syria and even more Hamas in Gaza on October 7, 2023. Iran’s clients raised the cost of their terrorism beyond acceptable/tolerable levels. Al-Assad was toppled. Israel struck back with a ferocity that shattered the status quo: Hamas has been destroyed as an effective fighting force; the Israeli Defense Forces (IDF) has almost complete freedom of movement in Gaza; Lebanon invaded, and Hezbollah pushed back to the greatest extent in a generation.

Iran was also struck directly, repeatedly, and severely by not only Israel but the U.S., and it was utterly isolated in the Middle East. Iran found that it had quickly lost its conflict militarily.

Cornered and existentially threatened, the terrorists struck back with the only ways they know: more terror, not just through client proxies but directly as a state. Iran was no longer just a state sponsor of terrorism but a state perpetrator of it. And Iran became more isolated still. So, it reached for the lever it has always had: the Strait of Hormuz. It did so to broaden its conflict with the U.S. and Israel beyond the military one it had already lost—to make its military defeat only a short-term one and allow it to regroup to wage it anew later.

However, by pulling the economic lever that has always been within its reach, it has now reached its level of deepest isolation.

Iran’s “Hormuz play” is to inflict global pain to a level the world will refuse to endure and thereby convince its adversaries to stand down. Iran calculated that it could force its people to endure more suffering (even to the greatest extremities) than a lesser amount that the world would willingly tolerate.

The U.S. and Israel clearly misjudged the level to which Iran’s regime would (or could?) take this; the level that the Iranian people would tolerate without revolting; and the time needed to take both, or either, to the breaking point.

So, the siege continues, and like all sieges, the suffering is greatest among the weakest as the besieged warriors divert increasingly constricted resources to themselves. The same thing is happening in Cuba. The same thing happened before in Venezuela. The same thing has been happening for decades in North Korea. Putin’s Russia, too, could be added to this list.

All involved have learned something. The world has learned that Iran has no limits. It is even more dangerous and despicable than it was thought and tolerated to be. That Iran means its rhetoric. “Death to America” and “Death to Israel” are not just orchestrated slogans chanted on cue. Iran’s Islamic Revolutionary Guard Corps (IRGC) means “Death,” and it means it far more broadly and brutally than the region or the world imagined. And the IRGC is more than willing to start the “Death” among its own people.

Yet Iran should be learning something too. Assuredly, there are limits at which its terror will not be tolerated. But, too, a deeper, unfolding lesson: Markets have a power of their own.

The problem—as Iran is learning and will learn increasingly in the future—with an ace is that you can only play it once.

The world now knows Iran and the Strait of Hormuz are unreliable. The Strait is insecure and cannot be completely secured. And the Houthis can do the same thing to the Bab el-Mandeb Strait.

A workaround must be devised. And because the commodity in question is so valuable—and the current conflict has only underscored its value—the world will devise one.

Iran is not only not going to gain nuclear weapons, but its conduct in this conflict has only proven why it cannot be allowed to do so; it is losing the leverage it had when it entered this conflict. The Strait of Hormuz will never be allowed to be the chokepoint it once was.

Pipelines for oil already exist. More will be built and are already being proposed. Overland routes exist for other materials. More will be devised. New areas will be turned to for these materials: Brazil, Guyana, Venezuela, and the U.S. Yes, prices will begin at higher levels; however, as more resources are poured into developing these alternatives, prices will fall. And all these alternatives will offer greater security and reliability: things that others will be willing to pay for.

Just as Iran overplayed its terrorist hand, it has overplayed the Hormuz ace it held in its hand. Because the greatest value of an ace in the hole lies not in playing it but in holding it—not in the trump, but in the threat.

The upshot of the current conflict is: Not only will Iran not obtain the nuclear weapon it wanted and have its military power seriously degraded, but it will also find that the leverage it once had—its ability to block the Strait of Hormuz—is also greatly diminished.