October 31, 2026 (Bloomberg) – As US President Donald Trump threatens new attacks on Iran, the ongoing strikes on commercial ships by Tehran have put both sides in a tough economic standoff.
For Iran, the US blockade on its oil exports has significantly reduced a vital source of military funding and severely impacted its $300 billion economy, with only a small amount of the prewar 2 million barrels per day making it out of the country via land routes.
For the US, the increasing costs of shipping oil through the Strait of Hormuz—despite US Central Command’s assertion that most Iranian attacks fail or are blocked—have kept fuel prices elevated, leading to political pushback as midterm elections approach.
Iran doesn't need to conduct frequent attacks to maintain high oil prices; even though shipments through the strait are at about 80% of prewar levels, the associated risks have raised insurance costs. In early October, it was often more expensive to hire a supertanker than launch a rocket into space.
Significant economic pressure is unlikely to change Iran's strategy of “harassing fire” in the strait, according to Jim Lamson, a visiting research fellow at King’s College London and former CIA analyst specializing in Iran and the Middle East. He notes that Tehran still has a stockpile of missile components, enabling them to assemble anti-ship weapons, despite US airstrikes degrading their capability to produce them on a large scale.
“They have been preparing for a long-term asymmetric conflict with the US for decades,” Lamson explained. “Building resilience, redundancy, and stockpiling have been integral to their military culture.”
Though there have been at least 28 open-source reports of damage to ships in the strait in October, US officials indicate that Iran has not increased its attack frequency. Instead, more serious ship damages have resulted in additional incidents being reported, with many cases involving strikes on engine rooms, which can render vessels inoperable.
Iran's ongoing attacks present a few options, none of which guarantee favorable outcomes. Trump might order airstrikes after the elections, though these may not fully incapacitate Iran’s ability to launch their missiles, which are often basic weapons targeting ships in specific areas.
This leads to the need to make the economic toll of Iranian attacks on ships unbearable, said John Miller, a retired US Navy vice admiral and former head of CENTCOM.
“As long as they wish to maintain a blockade, they can keep attacking ships in the Strait of Hormuz," Miller stated. "This has always been the case: You can make them unwilling or unable.”
For now, the tanker industry continues to send oil from the Middle East at nearly prewar levels, and it's uncertain what kind of escalation would halt that. Ships passing through the strait are earning supertanker owners tens of millions of dollars, with crew members making several months’ pay for a few days of risky navigation.
For now, this arrangement appears sufficient to maintain trade. The International Maritime Organization estimates there have been 121 incidents in Hormuz and the surrounding region since the conflict began, including 24 confirmed seafarer deaths.
It's worth noting that no vessel has encountered a floating mine while navigating the strait, according to a US official. However, Iran recently claimed that a mine damaged a tanker, and the UKMTO, which monitors shipping security, reported a tanker was harmed by explosives attached to its hull.
Iran utilizes both traditional cruise missiles and drones to target shipping, while US forces are coordinating and protecting ship transits primarily with aerial support. According to CENTCOM, about 95% of vessels transit the strait without incident.
The US collaborates closely with the shipping industry, sharing information and discussing timing, routes, and vessel numbers for those passing through the strait. US forces then plan how to ensure safe transit, including what resources will be deployed to monitor and respond to threats if needed.
Miller noted that much of Iran's ability to monitor anything beyond the visual range of its shores has been nearly destroyed over the past eight months. Consequently, the missiles they use are often fired without precise targeting, landing near where Iranian planners believe ships might be. Once the missiles approach, radar or infrared guidance helps direct them to nearby targets.
Aircraft with affordable munitions, like the APKWS missile costing around $20,000 for a guidance kit from BAE Systems Plc, typically handle these types of attacks. The more advanced and costly air defense interceptors on US Navy ships, such as the Raytheon SM-6 and SM-3 Block IIA, are reserved for ballistic missile threats.
Trump has hinted at plans for renewed attacks on Iran after the midterm elections on November 3. However, it's uncertain if airstrikes—particularly against an enemy that has prepared for decades to safeguard crucial capabilities from such attacks—will change the situation in the strait, according to Emma Salisbury, a non-resident senior fellow at the Foreign Policy Research Institute and associate fellow at the Royal Navy Strategic Studies Centre.
A increase in conflict could drive oil prices into the range of $120-$130, according to Ziad Daoud, chief emerging markets economist at Bloomberg Economics.
Both sides “might prefer a brief conflict to enhance their negotiating leverage,” he added.