How a 1951 oil fight led to today’s battle over the Strait of Hormuz

The war and the strait

The war began on Feb. 28, when U.S. and Israeli forces struck Iran while nuclear talks were still underway. Israeli strikes killed Iran’s supreme leader, Ali Khamenei, and dozens of other senior officials. President Trump said the aim was to “eliminate imminent threats from the Iranian regime.” U.S. officials listed three military objectives: destroy Iran’s ballistic missiles, destroy its navy and ensure that Iran does not get a nuclear weapon. This week, China’s premier, Li Qiang, called the strikes “blatant aggression” because they lacked UN Security Council authorization, Iran’s official news agency IRNA reported.

In October, Trump said Iran had been “two weeks away from having a nuclear weapon.” The Congressional Research Service, which prepares reports for Congress, notes that Iran’s nuclear facilities were not on the April 6 target list of U.S. Central Command (CENTCOM), which runs American military operations in the Middle East, and “do not appear to have been a primary target.”

Iran fired missiles and drones at Israel and at Gulf states that host U.S. forces, and its attacks on commercial ships “effectively halted traffic” through Hormuz in the first days of the war. Iran’s government survived, and on March 8 its leaders chose Khamenei’s son, Mojtaba Khamenei, to succeed him as supreme leader. He has not appeared in public since.

A ceasefire and a deal

In April, with Pakistan mediating, the two sides agreed to a ceasefire. Trump said it was “subject to… Iran agreeing to the COMPLETE, IMMEDIATE, and SAFE OPENING of the Strait of Hormuz.” Talks in Pakistan’s capital, Islamabad, failed, and on April 13 the U.S. began blockading all shipping to and from Iranian ports.

On June 17, Trump and Iran’s president, Masoud Pezeshkian, signed a Memorandum of Understanding: the U.S. would end the blockade and waive oil sanctions, and Iran would use “best efforts” to allow safe passage through the strait. After Iran attacked commercial vessels, the U.S. resumed strikes on June 26. Trump declared the agreement “over” on July 8, and the blockade returned on July 14.

Competing claims

Each side says it controls the strait. “Until an agreement or understanding is reached regarding this strait, it will not be open to everyone,” Iran’s foreign minister, Abbas Araghchi, said on Oct. 21. An Iranian body created during the war keeps a “non-conformity list” of ships and says it has added 122 vessels to it. Adm. Brad Cooper, the head of CENTCOM, says the strait “is controlled by the United States and our regional partners, not Iran.” He said about 400 merchant ships passed through in the week before Oct. 16, and a CENTCOM spokesman said about 97% of ships attempting the crossing got through without being hit. Iran says Washington exaggerates the numbers.

The two sides also disagree about what is hitting the ships. Iran’s Islamic Revolutionary Guard Corps, whose navy runs most of Iran’s operations in the strait, says vessels taking routes it has not authorized are striking mines. CENTCOM says it has cleared the mines and that the ships are being hit by IRGC projectiles.

Independent figures show traffic moving at reduced levels, with frequent attacks on ships. The UK Maritime Trade Operations agency, a British military office to which ships report attacks, confirmed at least 12 ships attacked in the week ending Oct. 16; one sank and two were disabled. It says most attacked vessels do not report, and that it knows of incidents it could not verify. October has seen the most ship attacks of the war, according to an Al Jazeera analysis. The ship-tracking firm Kpler put oil flows at 11.6 million barrels a day in the week to Oct. 13, about 68% of its own pre-war baseline of 17.1 million.

The blockade and the toll

CENTCOM says there have been “no exports or imports to Iran without U.S. permission,” apart from humanitarian shipments, and that the blockade has cost Iran $25 billion in oil export income. That figure comes from the U.S. military and has not been independently verified.

The Congressional Research Service, citing the U.S.-based Human Rights Activists News Agency, or HRANA, says U.S.-Israeli strikes had killed 3,636 Iranians, 1,701 of them civilians, as of April 7, and 18 U.S. service members had been killed as of Sept. 15. CENTCOM’s commander, citing the UN’s International Maritime Organization, says more than 20 civilian mariners have been killed since February, and the IMO’s chief says about 6,000 seafarers are stranded.

The negotiating positions

Iran has offered a plan with seven conditions, including an end to the U.S. blockade, the lifting of sanctions on Iranian oil and the release of frozen Iranian assets. The full list has not been published. If the U.S. accepts, Iran says, the strait would reopen on the sixth day. Mohsen Rezaei, the secretary of Iran’s Supreme National Security Council, has said there will be no reopening “until these conditions are met.”

The U.S. wants nuclear limits first. “If you don’t want a nuclear weapon, then why do you need 60 per cent enriched fuel?” Vice President JD Vance told Reuters on Oct. 5. “We’re not going to trade words for actions.” Trump has called for “zero uranium enrichment.”

Why the strait matters

In 2024, oil flows through Hormuz averaged 20 million barrels a day, about 20% of world consumption of petroleum liquids, according to the U.S. Energy Information Administration. About a fifth of global liquefied natural gas trade, mostly from Qatar, also passed through, and about 84% of the crude and 83% of the gas went to Asia. The U.S. imported about 0.5 million barrels a day through the strait. Saudi and Emirati pipelines that bypass it could carry only about 2.6 million barrels a day of additional oil, which is why the EIA calls it one of the world’s most important oil chokepoints. The EIA’s figure includes crude oil and refined products and is not directly comparable with Kpler’s.

Brent crude touched $111.99 a barrel on Oct. 20, its highest price since May 20. On Feb. 27, the day before the war began, it stood at $72.48.

Iran nationalizes its oil

In March 1951, Iran’s parliament, the Majlis, voted unanimously to nationalize the Anglo-Iranian Oil Company, the British-owned firm that had controlled Iran’s oil for decades. Mohammad Mosaddeq, the nationalist lawmaker who led the campaign, became prime minister in late April, and the nationalization law was enacted on May 1.

Britain said it could not accept Iran’s “unilateral cancellation” of the company’s contract and refused to deal directly with Mosaddeq. In September 1951, it banned shipments to Iran of steel, sugar, iron, oil-processing equipment and other goods Iran could have resold for dollars. The Royal Navy sent a cruiser and four destroyers to exercise near Iran’s Abadan oil refinery, a show of force that a CIA history calls “ostentatious military maneuvers.” Iran’s oil sales abroad gradually stopped.

Britain and the United States saw the takeover as a threat, and Washington also feared that a weakened Iran could drift toward the Soviet Union. Within two years, the two governments moved to remove Mosaddeq.

Today’s echoIran’s conditions for reopening the strait include lifting the U.S. blockade of its ports and the sanctions on its oil.

The coup

In August 1953, the U.S. and Britain helped overthrow Mosaddeq, and the Shah, Iran’s king, returned to power. In 2013, the National Security Archive published declassified CIA documents that include what is believed to be the agency’s first formal acknowledgment that it helped plan and carry out the coup.

The National Security Archive, a research institute at George Washington University, notes that “political partisans on all sides, including the Iranian government, regularly invoke” it. For the next 25 years, the U.S. backed the Shah, and the 1979 revolution that toppled him was also directed against the United States.

Today’s echoIranian leaders still cite the coup as a reason not to trust Washington. Iran’s foreign minister says the nuclear issue is “nothing more than a pretext” for U.S. pressure.

Revolution and the hostage crisis

Protests against the Shah grew into a revolution. The Shah fled on Jan. 16, 1979; the cleric Ayatollah Ruhollah Khomeini, the revolution’s leader, returned from exile on Feb. 1; and Iran was declared an Islamic Republic on April 1.

After the ailing Shah was admitted to the U.S. for medical treatment, students seized the U.S. Embassy in Tehran on Nov. 4, 1979, with the new government’s approval, and held Americans hostage for 444 days, until Jan. 20, 1981. The U.S. cut diplomatic ties on April 7, 1980. The two countries have had no formal relations since. U.S. leaders still invoke it. In 2020, President Trump said 52 Iranian sites he had threatened to strike represented “the 52 American hostages taken by Iran many years ago.”

Today’s echoThe current talks are indirect, with Pakistan and Qatar carrying messages. Pakistan’s army chief, Field Marshal Asim Munir, was in Tehran on Oct. 20–21.

The Tanker War

Iraq invaded Iran in 1980. In 1984, Iraq began attacking Iran’s oil export terminal at Kharg Island, and Iran retaliated against neutral ships carrying cargo to Kuwait. Much of that cargo was then shipped overland to Iraq.

To protect Kuwaiti oil, the U.S. registered 11 Kuwaiti tankers under the American flag so the Navy could legally defend them. The escort mission, Operation Earnest Will, ran from July 1987 to September 1988; the Navy calls it the largest naval convoy operation since World War II. On the first convoy, the reflagged tanker Bridgeton struck an Iranian mine.

Praying Mantis and Iran Air 655

By late 1987, the escorts had brought the U.S. Navy into direct combat with Iran. On April 14, 1988, the frigate USS Samuel B. Roberts struck an Iranian mine. Four days later, the Navy launched Operation Praying Mantis. It destroyed two Iranian oil platforms that the Navy says were used as military posts, sank two Iranian ships and badly damaged a third.

On July 3, 1988, the cruiser USS Vincennes shot down Iran Air Flight 655, a civilian airliner, killing all 290 people aboard. The Navy says the crew mistook the jet for an Iranian fighter and calls the shootdown a “tragic accident.” Iran has called it deliberate. Iran’s government still points to the shootdown as a reason to distrust the United States. In 2003, the International Court of Justice, the UN’s top court, ruled that U.S. attacks on Iranian oil platforms in 1987 and 1988 could not be justified as self-defense, but it rejected Iran’s claim for reparations and a U.S. counterclaim.

The nuclear deal and its collapse

After 1988, the dispute shifted to Iran’s nuclear program. In 2015, Iran, the U.S., China, France, Germany, Russia, Britain and the European Union agreed to the Joint Comprehensive Plan of Action. Iran accepted limits on its nuclear program, including a 3.67% cap on uranium enrichment, and nuclear-related sanctions were lifted in January 2016.

On May 8, 2018, Trump withdrew the U.S. from the deal, calling it “one of the worst and most one-sided transactions,” and reimposed sanctions, including on Iran’s oil. Iran then exceeded the deal’s limits.

In April 2021, days after an explosion that Iran blamed on Israel damaged its underground enrichment plant at Natanz, Iran began enriching uranium to 60%. The International Atomic Energy Agency (IAEA), the UN’s nuclear watchdog, confirmed the start on April 17. Weapons-grade uranium is about 90%. By May 17, 2025, the IAEA estimated, Iran held 408.6 kilograms of uranium enriched up to 60%, up by about half in three months. Reuters reported that this was enough, by an IAEA yardstick, for about nine bombs if enriched further.

Today’s echoRezaei said on Oct. 20 that “not a single gram of enriched uranium will be removed from Iran.”

The 12-day war

On June 13, 2025, Israel attacked Iran, and the two countries fought for 12 days. On June 21, the U.S. struck nuclear sites at Fordow, Natanz and Isfahan with 14 of its largest bunker-busting bombs. Initial U.S. assessments said the sites suffered “extremely severe damage.”

The Congressional Research Service called the status of Iran’s highly enriched uranium “uncertain,” and the IAEA has not been able to inspect the struck sites since. Iran canceled a sixth round of indirect talks with the U.S.

Today’s echoThis week, Vance described the U.S. goal as a “long-term” and “verifiable commitment” by Iran not to rebuild. Al Jazeera reads that as a possible softening.

Where things stand

Eight months after the 12-day war, the U.S. and Israel went to war with Iran. Since the June agreement collapsed, each side has used the strait as leverage: Iran by restricting passage, and the U.S. by blockading Iran’s ports and demanding nuclear limits. Iran wants the blockade and sanctions lifted first. The U.S. wants nuclear limits first.

What it means for your wallet

Gasoline prices have climbed since the war began. The national average for a gallon of regular was $4.28 in the week of Oct. 19, up from $2.94 in the week of Feb. 23. The Bureau of Labor Statistics, the federal agency that tracks consumer prices, found gasoline up 34.2% over the year to September. Gasoline alone accounted for more than half of the 0.6% increase in consumer prices in September. Prices overall were up 3.7% from a year earlier, and 2.6% excluding food and energy. Airfares, which depend heavily on jet fuel, were up 22.4%.

The Federal Reserve, the U.S. central bank, aims for 2% inflation. When prices rise faster, it can raise the federal funds rate, its main interest rate, which makes borrowing more expensive and slows spending. On Sept. 16, the Fed raised the rate to a range of 3.75% to 4%, the first increase under its chair, Kevin Warsh. Credit-card rates usually rise soon after a Fed increase, because most cards are tied to the prime rate, which stood at 7% on Oct. 20. Mortgage rates track the 10-year Treasury yield, which was about 5.1% on Oct. 21. The average 30-year fixed mortgage rate was 7.40% on Oct. 15, according to Freddie Mac.

The last comparable oil shocks came in the 1970s. During the 1973 Arab-Israeli war, Arab oil producers imposed an embargo on the United States and cut production, nearly quadrupling the price of oil, from $2.90 a barrel to $11.65 by January 1974. Iran’s revolution then cut its oil output by 4.8 million barrels a day, about 7% of world production. Amid panic buying and strong demand, oil prices more than doubled between April 1979 and April 1980. Paul Volcker, who became Fed chair in August 1979, tightened the money supply so hard that the federal funds rate approached 20% in late 1980 and early 1981. By October 1982, inflation had fallen to about 5%, but the recession sent unemployment to 10.8% by the end of the year, its highest since World War II.

The Fed’s next rate decision is due Oct. 28. On Oct. 16, futures traders put the odds of a rate increase at that meeting at about 15%, CNBC reported.

What to watch

Oct. 27: Israel’s election. Trump has endorsed Israel’s prime minister, Benjamin Netanyahu, and said that if Israel picks anyone else, “America will have to do this work ourselves.”

Nov. 3: the U.S. midterms. The Financial Times reported that Trump opposed restarting the war before the vote, and Iranian officials told Reuters they see little chance of a deal before it. Al Jazeera, citing U.S. media, reports that Trump has told the military to prepare for larger attacks after the election.

More U.S. forces. Fox News, citing two U.S. officials, reported that a carrier group and a Marine unit would bring about 10,000 more personnel to the region by the end of November. The deployment has not been officially announced.