The Hormuz Thesis - What if America is not in a hurry to open Hormuz?

What follows is a shared post from X by @gCaptain @Johnkonrad, on the current naval conflict that is disrupting the global energy trade. The original article can be found at gCaptain. The world’s leading maritime and offshore website, dedicated to quality news and building an interactive community of maritime professionals.

Captain John Konrad is the founder and CEO of gCaptain, one of the world’s most-read maritime news websites, and a member of the Pentagon Press Corps. He holds a USCG Master Unlimited license. John studied naval architecture at the U.S. Naval Academy before graduating from SUNY Maritime College with a degree in Marine Transportation.

The Strait of Hormuz is twenty-one miles wide. Two shipping channels, each two miles across, separated by a two-mile buffer. There is no alternative. Saudi Arabia’s East-West Pipeline to Yanbu and the UAE’s pipeline to Fujairah can handle maybe five million barrels combined. The math doesn’t work. The bottleneck is not political. It is geological and hydrographic.

Every TV analyst in America is talking about minesweepers and carrier strike groups. They are asking the wrong questions. The binding constraint on Hormuz was never a minefield or insurance. It is the US Navy’s willingness and ability to reopen it.

Every talking point suggests the White House and Navy are working hard to reopen the strait but progress is slow. A new posts on Truth Social suggests we may have to considet a new hypothesis.

“I wonder what would happen if we “finished off” what’s left of the Iranian Terror State, and let the Countries that use it, we don’t, be responsible for the so called Strait?” wrote President Trump in a psot this morning. “That would get some of our non-responsive “Allies” in gear, and fast!!!”

Which leads to a question, White House may have no intention of reopening the Strait of Hormuz?

The Insurance Kill Switch

When the seven P&I clubs belonging to the International Group issued 72-hour cancellation notices for war risk coverage in the Persian Gulf on March 5, they did not just raise costs. They made transit impossible.

P&I clubs insure roughly 90 percent of the world’s ocean-going tonnage. Without their coverage, ships cannot sail. Port authorities will not let them dock. Banks will not finance the cargo. Charterers will not book the vessel. The entire system, from loading berth to discharge terminal, is underwritten by a chain of contracts that begins with a club in London, Oslo, or Tokyo. When the clubs pulled war risk extensions, that chain broke. Not for a few ships. For the global fleet.

War risk premiums jumped from 0.25 percent to 1 percent of hull value, renewable every seven days. VLCC charter rates quadrupled to nearly $800,000 per day. Over 1,000 vessels are now trapped in the Persian Gulf, burning charter costs with nowhere to go. By March 3, only four ships crossed the Strait, down from a seven-day average of seventy-seven.

Then Trump did something that almost nobody in the press understood.

He ordered the U.S. International Development Finance Corporation to create a $20 billion maritime reinsurance facility, with Chubb as lead underwriter, making the United States government the insurer of last resort for Gulf shipping. A sovereign nation positioned itself as the backstop for war risk insurance on the world’s most critical maritime chokepoint. The DFC facility, coordinated with US Central Command and Treasury, offers hull, machinery, and cargo coverage on a rolling basis to eligible vessels.

The United States now controls the on/off switch for the Strait of Hormuz. Not through naval firepower. Through insurance.

Read the latest MARAD advisory carefully: U.S.-flagged, owned, or crewed commercial vessels operating in these areas should maintain a minimum standoff of 30 nautical miles from U.S. military vessels.

And read this part of the DFC announcement again… “coordinated with US Central Command.”

They cannot pass without the Navy permission.

The green light has not appeared.

The Maritime Dream Team That Was

To understand why this matters, you need to understand what Trump built and what was destroyed.

Trump came into his second term determined to restore American maritime power. He assembled the greatest collection of maritime minds in key government positions since Nixon. He put Mike Waltz, creator of the SHIPS for America Act, as head of the National Security Council. He created a Maritime Office in the White House. He appointed maritime advocates to key positions throughout the administration. He signed a sweeping Maritime Executive Order in April 2025 directing a Maritime Action Plan across Defense, State, Transportation, and Homeland Security.

He started targeting chokepoints: Panama, the Red Sea, Suez, the Greenland-UK Gap. He launched investigations into Gibraltar and Spain. He created USTR actions to tariff Chinese-built and operated ships. He called CMA CGM’s CEO Rodolphe Saadé to the Oval Office and secured a $20 billion commitment to American maritime investment.

The ambition was real.

So was the pushback.

Shipowners lined up outside USTR to protest the China shipping tariffs. Nearly every economist on the planet lined up against the maritime tariff proposals. The entire U.S. tech sector asked for China concessions, and what did China want in return? A pause to USTR.

Then Signalgate. The media leaked a private conversation about attacking the Houthis and reopening the Red Sea. The operation was stunned. Signalgate forced a reorganization. Waltz was moved to the UN. The Maritime Office was downsized. The NSC was gutted.

That was the moment every maritime initiative began to stall.

What collapsed: Panama did not follow through on free transits for U.S. ships. CMA CGM’s $20 billion commitment evaporated as the company ordered vessels from China and India instead. Congress stalled on the SHIPS Act. The UK traded the Chagos Islands, including Diego Garcia, to Mauritius for a sweetheart deal, putting a critical naval base at risk. Key Navy appointees were slow-rolled or blocked in the Senate.

Then it came to a head at the International Maritime Organization in London. In April 2025, sixty-three countries voted to approve the Net-Zero Framework, a global carbon pricing mechanism on every ship over 5,000 tons. What did Trump’s negotiators ask for? That America’s tiny fleet of merchant ships be exempt. Europe refused, claiming American maritime interests are “irrelevant” and that we lack the leverage or votes.

The U.S. walked out. In October, at the adoption vote, Trump called it a “Global Green New Scam Tax on Shipping.” Trump played hardball. The State Department threatened sanctions against any country that voted yes. Fifty-seven countries voted to delay.

A pyrrhic victory. The carbon tax was dead in the water, but we did not get exemptions for U.S. ships, and the White House began losing the wider war for chokepoints and maritime trade with the City of London, Europe and China.

Then two body blows in quick succession.

On February 20, the Supreme Court ruled 6-3 that IEEPA does not authorize the President to impose tariffs, invalidating the “Liberation Day” reciprocal tariffs and the China, Canada, and Mexico trafficking tariffs. An estimated $160 billion in tariff revenue, gone. Trump imposed 15 percent global tariffs under Section 122, but those are capped at 150 days and require Congressional extension.

His most powerful tariff tool was taken away by the courts. If you cannot tariff your way to compliance, you need another form of leverage.

And then the Golden Fleet.

In December, Trump announced a new class of Trump-class battleships at Mar-a-Lago: 30,000 to 40,000 tons, armed with hypersonic missiles, railguns, lasers, and nuclear cruise missiles. Twenty to twenty-five hulls. The most ambitious surface combatant program since World War II.

Within 72 hours, every national security think tank and academia – which all have close ties and funding with NATO nations – lined up to kill it. With no time for due dillegence CSIS published the hit piece “The Golden Fleet’s Battleship Will Never Sail” and estimated $9 billion per hull and predicted cancellation before the first ship hits water. The Foundation for Defense of Democracies called it a waste. Retired admirals on defense baords lined up to say the Navy should buy small distributed platforms instead. Every defense analyst competed to be quoted saying it was impossible.

The same establishment that produced three Zumwalts instead of thirty, and thirty almost useless Littorial Combat Ships instead of none, the same think tanks that has presided over the smallest Navy since World War I, lined up overnight to explain why America cannot build big ships anymore.

The same people who have no plan to close the destroyer gap that is right now undermining convoy escort operations in the Gulf.

The think tanks did not offer an alternative. They offered learned helplessness. And that helplessness is the context in which Hormuz is now playing out.

The Leverage Hypothesis

Now connect the dots.

Strike Iran, and Europe either bends or goes dark in an energy crisis.

The European shipping community and political establishment spent the past year dismissing, undermining, and mocking every Trump maritime initiative. They scoffed at the USTR tariffs. They laughed at the SHIPS Act. They blocked the IMO exemptions. They refused to take American maritime policy seriously.

Now their energy supply runs through an insurance facility controlled by Washington.

“Let their navies figure it out.” Except everyone knows they cannot. European naval forces are too small, too slow, and too poorly equipped for sustained convoy escort operations through a contested strait. All the European navies combined could not send more than three ships at a time to defend the Red Sea. An entire German task force sailed around Africa to avoid it.

Eventually Europe will have to capitulate to get the U.S. Navy, and the U.S. insurance backstop, to fully reopen the Strait.

What does “capitulate” look like? The IMO carbon tax. Greenland. Tariff concessions. The SHIPS Act. Every maritime policy priority that Europe and China have been blocking for the past year.

I had a long discussion with a senior Department of Energy official yesterday on background. I cannot share details but it is clear that the conventional Strait of Hormuz calculus, the one every cable news analyst is running, is wrong. The administration is not thinking about this the way CNN thinks they are.

The Earnest Will Precedent

There is a historical precedent that sharpens this hypothesis.

The last time the U.S. Navy escorted tankers through Hormuz was Operation Earnest Will during the Iran-Iraq Tanker War in 1987-88. Foreign tankers that wanted U.S. Navy protection had to reflag into the U.S. registry. Kuwaiti supertankers flew the American flag to get American escorts.

Trump has already said the Navy will escort ships through Hormuz “if necessary.” If the same reflagging requirement applies, every European and Asian tanker that wants a U.S. escort would need to fly the American flag.

Think about what that means for the SHIPS Act, the Jones Act, the U.S. flag fleet, and CMA CGM’s unfulfilled promise to triple its U.S.-flag vessels, Greenland. Hormuz becomes the forcing function for everything Trump’s maritime agenda could not achieve through legislation or diplomacy.

Meanwhile, Iran is selectively letting ships through. Turkish, Indian, Chinese, and some Saudi tankers have been permitted to transit via Iranian territorial waters. About eighteen tankers, mostly Chinese, have done so according to Lloyd’s. Western-allied ships are blocked.

The “closure” is really a sorting mechanism. Iran decides who trades and who does not. Unless the U.S. Navy reopens it for everyone. On America’s terms.

That’s the decision the world has to make, let Iran pull up a tollbooth or stop blocking Trump’s maritime plans.

The Domestic Calculus

But what about the homeland? Pundits are certain this strike just cost Republicans the midterms and possible the next presidential election.

Maybe. But maybe there is an alternative Hormuz hypothesis.

While TV oil analysts focus on the global price of oil, the real experts in Houston are watching something different: the fracturing of the global energy market.

The real threat is not $200 oil. It’s a fracture of the system. It is cheap energy in export nations and ruinous energy costs in places far from reserves. It’s $2 oil in the Persain Gulf, $20 dollar oil in the Gulf of America and $2,000 oil in the UK.

One global price only works if there is a surplus of tankers to arbitrage differentials. Before the Iran strikes, that surplus was razor-thin. Now, with supertankers stuck in the Gulf, it is gone.

Brent is at $106 today. WTI is under $100. Domestically, diesel is stabilizing and natural gas prices are falling as LNG that would normally be exported stays trapped at home. Trump issued a 60-day Jones Act waiver and opened Venezuelan oil sales to U.S. companies via a new Treasury license for PDVSA. These are exactly the moves you make if you are trying to drive U.S. prices down while the global market fractures.

Tankers charge by the day, so long-haul routes become comparatively more expensive. Venezuelan crude on short Gulf runs becomes far cheaper for U.S. refiners than Middle Eastern crude routed around the Cape of Good Hope for European or Asian buyers.

Look at who benefits. The three most powerful industry lobbies in the U.S. are tech, Wall Street, and energy. Tech gets cheaper LNG for data centers. Wall Street gets volatility and panic to extract trading profits. Energy companies were just given Venezuela and renewed Gulf access.

Meanwhile, California has been closing refineries and blocking pipelines, forcing gasoline imports from South Korea on ships with dayrates that are skyrocketing. Govenor Newsom, the leading canidate for President in 2028, is irrate. New England imports LNG and diesel by ship. If Hormuz stays closed, prices spike in those states. Deep blue states. Red state energy costs fall. Blue state costs rise. Europe capitulates on major policy disputes between now and the midterms.

“The only thing that will actually stabilize global oil markets — and thus gasoline prices for American drivers — is reopening the Strait of Hormuz,” wrote Newsom in a statement issued last week. “But Trump has offered no plan to do that. The U.S. cannot drill its way out of a crisis of the President’s own making.”

I want to be transparent: this political analysis is speculative. The relationship between energy prices and voting behavior has fragile links. But the directional logic is clear, and I would bet the White House sees it.

What the Navy Is Telling You

Look at what the Navy is doing. Or rather, not doing.

The U.S. Navy is in no rush to solve this problem. They are methodically, deliberately, taking their time. Army battalions are not mobilizing. The Marines called in from Japan are slow-steaming across the Pacific; it could be weeks until they are ready. Minesweepers are still far from the battlespace. Carriers are slowly rotating, not surging.

Someone at the top told them to take their time. That signal has to be coming from the White House.

Every day, approximately 1,000 trapped vessels are not available for charter. Every day, European energy dependence deepens. Every day, the DFC reinsurance facility becomes more central to the global shipping system. Every day, the case for concessions on tariffs, the IMO, Greenland, and the SHIPS Act becomes harder for Europe to refuse.

And what does the Navy get for playing along? Support for battleships and stronger allies willing to spend money building their own destroyers when it becomes clear to the world how weak their navies have become.

What I Am Arguing, and What I Am Not

I am not arguing that Trump planned this from the beginning – The P&I club withdrawal was a cascading system failure that no central planner could have predicted or orchestrated – but it is possible.

What I am arguing is that the administration has, whether by design or adaptation, assembled the tools to exploit this moment. The DFC facility is the option. The incomplete P&I coverage is the strike price. The Jones Act waiver and Venezuela sanctions easing are hedge positions. The Navy’s deliberate pace is time decay working in America’s favor.

The strongest version of this thesis is not “Trump is playing 4D chess.” It is that the administration holds more options than anyone realizes, and the insurance mechanism, not the Navy, is the real lever of power.

The man who launched the SHIPS Act, tariffed Chinese shipping, killed the IMO carbon tax vote, brought CMA CGM to the Oval Office, signed the most ambitious Maritime Executive Order in decades, and then made the U.S. government the insurer of last resort for the world’s most important shipping lane does not lack a maritime strategy.

An alternative version of this scenario is simpler: apathy. America just does not care about ships or how long it takes to reopen Hormuz or what happens to Europe as a result. But that version raises its own question. It was European encouragement of American maritime apathy, and European exploitation of that apathy to corner the global shipping industry and keep control in London, that created this situation. If American indifference is the reason the Navy is taking its time, is that not Europe’s fault for cultivating it?

The Endgame Question

The biggest pushback on the Iran strikes among Democrats and the mainstream press is the question: what is the endgame?

He has one. But maybe he cannot say it out loud.

Because the endgame is leverage. And you do not announce leverage. You apply it.

I want to be clear about what this article is. It is a hypothesis written by an American ship captain who supports Trump and who has an agenda: getting Europe to wake up to the growing importance of U.S. maritime interests. To stop blocking the restoration of US shipbuilding and our US Merchant Marine.

Go look at the evidence. Formulate your own hypothesis. Test yours. Test mine.

But do not ask “what is the endgame” as if nobody in Washington has an answer. The answer is on the balance sheets of every P&I club in London, in the empty berths of every European naval base, and in the 1,000 ships sitting dead in the water, burning money, waiting for a green light that may not come until the price is right.