Iran's Strait of Hormuz 'trump card' losing strategic value, expert says

Dr. Thomas O'Donnell, an American energy and geopolitics strategist, believes Iran's primary strategic leverage, the Strait of Hormuz, is significantly diminishing in value. Despite the Islamic Republic's efforts to protect itself from regime change, O'Donnell stated that the strait's importance is waning and will continue to do so.

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Its trump card, the Strait of Hormuz, is losing its strategic value and will continue to do so.

O'Donnell explained that with many of Iran's regional proxies weakened and its nuclear ambitions delayed, the country's remaining insurance policy against attempts to topple the regime relies on rockets, drones, and the ability to threaten the Strait of Hormuz. However, these elements are losing their former impact.

While 14 to 15 million barrels of oil traversed the strait daily before the war, O'Donnell suggests that global markets can now manage without much of that supply. He cited Saudi Arabia's East-West Crude Oil Pipeline, which moves about 5 million barrels per day, and the UAE's pipeline capacity of 1.5 to 1.8 million barrels per day. Additionally, the International Energy Agency's release of 400 million barrels and the U.S. Strategic Petroleum Reserve of 172 million barrels demonstrate alternative supply capabilities.

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There's more production in other places, but [the disruption of] oil has not been anything like it would have been 20 years ago if they closed the Strait.

O'Donnell noted that increased oil production in other regions, particularly the U.S. fracking industry, has mitigated the damage from potential disruptions. He described oil price volatility, such as a drop from over $100 to $80 a barrel, as 'geostrategic variability' rather than a fundamental market issue.

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The oil price, it’ll go up and down. The fact that it went over $100 [a barrel], and the next day it was $80, that means that’s geostrategic variability. That’s not fundamental.

Furthermore, planned pipelines, including the UAE's expansion and an Iraq-to-Syria project, are creating alternative routes that will further weaken Hormuz's strategic significance. U.S. Treasury Secretary Scott Bessent predicted that the strait could become 'just another body of water' within two years, with 50-70% of its current exports rerouted through underground pipelines.

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The strait 'is going to become just another body of water' over the next two years.