Iran has taken its control over the Strait of Hormuz to the next level, effectively moving toward a “toll booth” system on one of the world’s most critical energy routes. According to Reuters, Iranian officials and lawmakers are actively considering imposing transit fees on ships passing through the strait, with proposals to charge countries for the movement of oil, gas, and even food supplies in Chinese Yuan. Bloomberg has further reported that vessels are increasingly being required to follow Iranian-coordinated routes and protocols, signaling a shift from free navigation to controlled passage.
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Roughly 20% of global oil flows through Hormuz. By restricting access to Western and Gulf Arab states assisting the US and Israel in the war and attaching conditions to transit, Iran is not just disrupting supply — it is directly challenging the foundation of U.S. global economic dominance: the petrodollar system. This was a major underestimation by the Trump Administration.
For decades, Washington’s power has rested on its ability to control oil flows and ensure that energy is traded in U.S. dollars. This system has guaranteed global demand for the dollar and given the United States immense leverage over international trade. Iran’s move threatens both. If oil passing through Hormuz begins shifting away from dollar-based transactions, it could accelerate the erosion of one of the key pillars of American influence.
Even U.S. President Donald Trump appeared caught off guard by the scale of Iran’s response. In recent remarks, he admitted he “didn’t think they would react this strongly,” while also acknowledging that Iran has proven to be “very strong” under pressure.
That admission points to a deeper miscalculation.
The immediate consequences are already visible.
Oil prices have surged sharply – up to $120 per barrel of oil– with markets warning of further increases if disruptions continue. But the ripple effects extend far beyond fuel. Energy is embedded in nearly every sector of the global economy — from transportation and manufacturing to agriculture.
As energy costs rise, so do the costs of producing fertilizers, transporting goods, and maintaining supply chains. The result is a cascade effect that ultimately lands on consumers, particularly through rising food prices. Analysts warn that households across Western economies could face significant increases in grocery costs of up 20% as these pressures build.
Source: SGT Report
