SUPPLY CHAINSThe Strait of Hormuz: The Supply Chain Loop That Broke the World
It took only five days after the attack on Iran by the United States and Israel in late February for Iran to close the Strait of Hormuz, one of the world’s most vital energy and maritime chokepoints.Understanding why the strait stayed open for so long, and why it’s not open now, requires thinking not in terms of current entities but in terms of loops.
It took only five days after the attack on Iran by the United States and Israel in late February for Iran to close the Strait of Hormuz, one of the world’s most vital energy and maritime chokepoints.
Describing the waterway as a place where Iran and the U.S. flex their muscles doesn’t tell the whole story. The story did not start on March 4, when Iran closed the strait with a combination of asymmetric naval tactics, geographic control and maritime blockades. It was years in the making.
Understanding why the strait stayed open for so long, and why it’s not open now, requires thinking not in terms of current entities but in terms of loops.
The Loop That Kept the Peace
Iran has long leveraged the Strait of Hormuz to transport its own oil to international markets. The revenue generated worked as Iran’s binding self-constraint. In the language of systems thinking, this is called a balancing loop: a mechanism where the system corrects itself.
Think of the predator-prey dynamics in ecology: when rabbits multiply, foxes thrive. When rabbits are scarce, fox populations decline and the rabbit population recovers.
The oscillation in Iran’s relationship with the West followed the same self-correcting logic. Iran’s revenues were the rabbits and the West’s diplomatic pressure were the foxes.
What’s known as the balancing self-deterrence brake loop kept aggression in check until its breakdown in 2025. The strait was not kept open by the U.S. navy. It was held open by the logic of restraint and self-interest.
The 2015 Joint Comprehensive Plan of Action (or JCPOA) was this loop in full action.
By 2013, Iran’s economy had contracted sharply as its oil exports fell to roughly one million barrels per day. Exactly as the loop predicted, the lowered revenue resulted in higher willingness to compromise.
Iran’s centrist President Hassan Rouhani signalled readiness for serious negotiations. The West welcomed the approach and offered a deal to Iran that would provide sanctions relief in exchange for nuclear constraints. The JCPOA restored Iranian oil exports, and although its aggression continued to be a threat, it never crossed into action.
How the Loop Was Broken
U.S. President Donald Trump’s withdrawal from the JCPOA during his first term in 2018 was the first blow to the loop, as it broke the link between Iran’s revenues and diplomatic engagement with the West.
