Strait of Hormuz crisis: Iran, shipping, and Australia's strategy

When Iran deterred shipping from the Strait of Hormuz following Operation Epic Fury, it sent shockwaves through global energy markets and exposed uncomfortable truths about Australia's dependence on maritime trade. 

Jennifer Parker, a Nonresident Fellow at the Lowy Institute and former Royal Australian Navy warfare officer, joins Research Fellow Charlie Lyons-Jones to explain what a naval blockade means for the crisis. They also unpack Australia’s new National Defence Strategy and discuss why Australia’s surface combatant fleet is the smallest it's been since the 1950s.

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Charlie Lyons-Jones: Hello and welcome to Lowy Institute Conversations. My name is Charlie Lyons-Jones, a research fellow at the Institute, and your host for today's episode. Before March this year, the Strait of Hormuz might have been well known to oil and gas executives, maritime strategists and residents in the Persian Gulf, but it was hardly a topic for dinner table conversation. All that changed, however, when President Donald Trump launched Operation Epic Fury — a US military campaign against Iran that saw the assassination of Iran's Supreme Leader and over 15,000 joint US and Israeli strikes across the country. In response, Iran closed the Strait of Hormuz, which wreaked havoc in global energy markets and saw the price of Brent crude soaring well above $100 a barrel. To discuss these issues, I'm joined today by Jennifer Parker, a non-resident fellow at the Lowy Institute. Jen served more than 20 years in the Royal Australian Navy as a principal warfare officer with significant operational experience in the Middle East. Welcome, Jen.

Jennifer Parker: Hey, Charlie, thanks for having me on. I'm looking forward to this discussion — and I'm already going to pick you up on saying that Iran has closed the Strait of Hormuz. Because I would say that Iran has not closed the Strait of Hormuz. There are still ships going through. In fact, according to Tanker Trackers online yesterday, there have been 150 tankers that have gone through the Strait since the first of March. The term I've been using is that they have deterred ships from going through the Strait, as opposed to technically closing it. The reason I think that's important is that when we come to — and I'm sure we'll get to it — how you go about reassuring ships to go through the Strait, the answers are different depending on whether you consider the strait closed or ships deterred.

Charlie Lyons-Jones: Interesting. Well, I thought maybe we might just go back to first principles and ask: what is the Strait of Hormuz? Where is it located? And why is it so important to the global economy?

Jennifer Parker: Geographically, it is a key body of water that connects the Gulf of Oman to the Persian Gulf. It's lodged between Iran on its northern coast and Oman on its southern coast. It is what a lot of people call a true choke point. A choke point is where, in the maritime domain, the land restricts the sea lanes — think of the Strait of Malacca, or the Bosphorus, or the Dardanelles. There are many examples. The Bab el-Mandeb, which your listeners may be familiar with, also had ships deterred from going through it over the last two years as the Houthis attacked vessels in the Gulf of Aden and the Red Sea.

The reason I call the Strait of Hormuz a true choke point is that it is the only way in and out of the Persian Gulf in the maritime domain. Whereas the Strait of Malacca — between Singapore, Malaysia and Indonesia — is another key trade route, if it were closed it would have a huge impact, but there are alternates through the Lombok Strait or the Sunda Strait through the Indonesian archipelago. The Strait of Hormuz is different: if you are not confident to send your ships through, there is simply no other way to get those goods through on shipping.

When we think about what goes through it and why we're dependent — 20% of the world's oil supplies, as everyone has now learned, but not just oil. Things like the precursors for plastics, fertiliser for growing food — and that matters for Australia, because while we grow a lot of food, we're not a food-secure nation in the sense that those inputs come from places like the Middle East. So a range of products go through there, and that is what makes it so central to the global economy.

Charlie Lyons-Jones: So why do you think civilian shipping stopped — or came close to stopping — shortly after the launch of Operation Epic Fury? What were the factors driving that?

Jennifer Parker: To understand this, you need to go back to the fact that Iran has a history of attacking and seizing shipping. This is not new. The scale of it is new, and the nature of this conflict is new — I'm not trying to compare this to other situations — but Iran has for a long time had an approach whereby, if they want to make a political point, one of the ways they do that is to attack shipping. This is partly because of their geography: as the country that dominates the northern coast of not only the Strait of Hormuz, but the Gulf of Oman and the Persian Gulf, their geography gives them an advantage in exercising control over shipping.

I reflect on when I was deployed to Bahrain in 2020 as the director of plans in the International Maritime Security Construct. That was a reassurance mission, in response to Iran limpet-mining a number of ships in 2019 in the Gulf of Oman and seizing some vessels in the Strait of Hormuz. And those aren't the only examples. So Iran has a history of this.

There's always been a concern that if there were a major conflict in the Middle East, one of the ways Iran would immediately escalate and impose costs on the US is by attacking shipping. Even in June 2025, during the 12-day war, when the US became involved in the final couple of days by striking Iranian nuclear facilities, there was significant concern about whether Iran would seek to attack shipping and, to use your term, close the Strait.

In terms of the current conflict: Iran has attacked 29 ships — potentially 30, there is some reporting about another — but the Joint Maritime Information Centre, based out of Bahrain within the Combined Maritime Forces, put out a report yesterday saying the total number was 29. They've attacked ships with UAVs, uncrewed surface vessels and cruise missiles. And this hasn't just been in the Strait of Hormuz — it's also been in the Gulf of Oman, vessels at anchor off Oman, vessels at anchor off the UAE, and vessels in the northern Arabian Gulf.

Because of those attacks, shipping companies have broadly decided — and as I said, there are some ships still going through — that it is not safe to go through. Initially, in the first week of the conflict, this was very much an insurance conversation. In maritime areas that are considered high risk — whether it's piracy off Somalia or the Red Sea situation — as risk increases, ships have to pay war risk insurance. There was an issue at the beginning of this conflict with ships getting the right coverage. But following that first week, I think the reality is that ships simply don't feel safe going through because of Iran's attacks.

That becomes more complicated because, a number of times during this conflict, Iranian state media and various officials have declared that mines have been laid in the strait. It isn't clear in the public domain whether they have been or not — and that matters, because one of the easiest ways to deter shipping is simply to say you've laid mines, even if you haven't. So for all those reasons, the majority of ship owners don't believe it is safe to go through right now.

But the reason I say 'deterred' rather than 'closed' is this: when you think about how you address the situation, if you imply the strait is closed, the question becomes, 'How do you open it?' And a lot of people say, 'Oh, convoy operations, send the Navy in.' But that's not how you solve this problem. To get shipping moving again, you need to reassure them it's safe, and you need to demonstrate that it's safe. That's a phased approach — but I'm sure we'll come to that.

Charlie Lyons-Jones: The situation following the US campaign against Iran has been quite dynamic — lots of developments, not much consistency, particularly from US political leadership. But earlier this week, United States Central Command stated that they would be enforcing a blockade of the Strait of Hormuz following the conclusion of the Islamabad talks over the weekend. Could you explain what exactly a naval blockade is, and what precisely do you think the US is trying to achieve by enforcing this one?

Jennifer Parker: Before I come to the blockade, just on the point about consistency — look, I think for years to come there'll be interesting analysis about this conflict and the relationship between political signalling and military campaigning. We've clearly seen a number of posts from President Trump using language that has been confusing, or stating things that aren't clear, and in some ways language that is just offensive. When we acknowledge that, though, we also need to acknowledge that there's been a lot of inconsistency from the Iranian regime as well. And we do focus in Australia a lot on President Trump — understandably, given the nature of some of those posts; you wouldn't expect a world leader to put a particular word I can't say on air into a social media post. But equally, when it comes to reassuring shipping, Iran have declared many times during this conflict that they won't attack shipping, or won't attack shipping from certain countries, or that everyone is free to go through except countries linked to Israel or the US — a range of things. I could keep going, but those statements haven't proven accurate. So the information space is chaotic for a number of reasons. And of course, a key element of warfare is information operations and information warfare — and now, with social media and 24/7 news cycles, we see that play out right in front of us.

Now, to the naval blockade. Effectively, it is a method of warfare under the law of naval warfare. Regardless of your views on whether the current conflict or the decision to enter it complies with the UN Charter, conflict is governed by rules around its conduct — to protect civilians and so forth. That body of rules is generally international humanitarian law and the law of armed conflict. The maritime subset is the law of naval warfare.

Under the law of naval warfare, when you are at war, you can enact a blockade on another country. What does that mean in practice? It means getting your ships into a position to board, search, and potentially seize any vessels going in and out of certain ports. Now, in the initial announcement, President Trump indicated this was a blockade of the Strait of Hormuz — but it's not. CENTCOM has clarified that it is a blockade of Iranian ports and the Iranian coastline, applying to any ships seeking to go in or out. What they are effectively trying to do is restrict ships leaving Iranian ports or the Iranian coastline, and ships going in.

Why would you do that? A couple of reasons. I mentioned that around 150 tankers or so have gone through the Strait in the last six weeks — nowhere near normal numbers. A large proportion of those have actually been Iranian tankers carrying Iranian oil. I was quite surprised the US allowed that to happen at the beginning of the conflict; there was presumably an assessment around oil markets. In fact, in the first couple of weeks the US lifted some sanctions on Iranian oil that was already at sea, to allow certain countries to accept it. So what they're trying to do with the blockade is put economic pressure on Iran — and there's a long history of that approach. I suspect they're also trying to prevent Iran from being resupplied.

When it comes to blockades, there are legal requirements under the law of naval warfare. First, it must allow humanitarian supplies through — you can't stop food and so forth; you can search the vessel, but those goods must be allowed to pass. Second, you can't blockade neutral ports, which is why you wouldn't blockade the Strait of Hormuz itself — that would restrict access to all the other Gulf countries' ports. Third, it must apply to everyone impartially, which is reflected in CENTCOM's announcement: it applies to all vessels flagged to any nation going in and out of Iranian ports, not just Iranian vessels. That makes sense — international shipping is international, with flags from all over the world.

It also needs to be effective — if ships are routinely breaking through, it doesn't qualify as an effective blockade. And finally, you need to formally declare that you're conducting one, which the US has done by releasing a notice to mariners letting shipping in the area know what's happening.

Charlie Lyons-Jones: And what do you think it would take to restore confidence among civilian shipping to go back through the Strait of Hormuz, and hopefully normalise the price of Brent crude?

Jennifer Parker: A lot. But let me explain that. Before I do, I'll just come back to the blockade briefly, because there's one thing I didn't mention. There's been a lot of reporting today — we're recording this on Wednesday the 15th of April — that the blockade has already been broken. I think a lot of that comes down to a misunderstanding: it's not a blockade of the Strait of Hormuz. You're also not going to be conducting boardings of vessels anywhere near Iran — the US has announced they'll do this in the Arabian Sea, not sitting outside a port and intercepting ships as they depart. So it is a distant blockade. And when the US announced it, they did give a grace period: any neutral vessel — any vessel flagged to a country not party to this armed conflict — that had already sailed and left an Iranian port before the blockade commenced would not be subject to it.

Now, to the question of getting ships going through the Strait again — this is the number one issue in the world right now, and it's not easy. When I've spoken about it over the last couple of weeks, I've tried to conceptualise it as two key phases.

The first phase is stopping Iran's ability to target shipping. You can do that two ways: either you degrade their military capability sufficiently that targeting shipping becomes very difficult — the risk is reduced, though never eliminated given Iran's geographic dominance of the strait — or you achieve it through diplomacy, and Iran agrees to stop attacking ships. I'd note that Iran has agreed to stop attacking ships, or certain categories of ships, a number of times in the last six weeks, without following through — although depending on the reporting in the last 24 hours, there may be something of a grace period emerging on ship attacks.

Once ships are comfortable they won't be attacked, the second phase is the reassurance piece. That means: sharing threat information with them — where are these mines, do they exist, what's being done to clear them? Mine clearance, if mines have been laid, will be extensive; it could take weeks depending on how many there are. It also means maintaining a naval presence — patrols in the area to demonstrate that if Iran tried to seize a vessel, as has happened before this conflict, there would be a response. You might also conduct some high-profile escorts, all of which signals: 'We are focused on keeping this trade route safe and open.' Above all of that, you'd need significant situational awareness to give early warning if Iran were preparing something. Those are the elements of a reassurance campaign to get shipping moving again. It is not something that will happen overnight.

Charlie Lyons-Jones: This crisis has really highlighted how vulnerable Australia is to a slowdown in civilian shipping through the Strait of Hormuz, and I thought it would be a good opportunity to unpack some elements of Australian defence policy. I know that in 2024 the National Defence Strategy was released, identifying a strategy of denial as a guiding principle of Australian force posture. Noting that another NDS is being written, I'm curious about your thoughts on what this crisis might mean for Australian force posture going forward.

Jennifer Parker: To answer that, we need to think about Australian defence strategy more broadly. A lot of Australian strategic debate throughout our history has circled around this tension between a continental strategy and a maritime strategy — are you defending the land, or do you need to defend the maritime domain and your maritime vulnerabilities?

This crisis — and I'm not quite ready to call it a crisis yet; I think we have a rocky ten years ahead, and this may pale in comparison to some of what's coming, but I don't want to depress everyone listening — this situation reinforces the fact that Australia is dependent on maritime trade. That should be obvious, but it doesn't always feature prominently enough in our strategic thinking. What do I mean by dependent? I mean that 99% of our imports and exports go through the maritime domain. But not just any imports and exports — if someone stops your new couch or your Nikes from getting to Australia, that's inconvenient, but it won't cripple the economy or our defence capability. The concern is our critical seaborne supply chains: our fuel, for example. As most Australians have now learned — and perhaps shouldn't have been surprised to learn — we import 91% of our fuel in a refined state from Southeast and Northeast Asia, and in an unrefined state from the same regions drawing on Middle Eastern crude. That just illustrates the dependency.

When you think about strategy, it shows that if you develop an approach where all you need to do is defend the land territory, then any country wanting to coerce Australia or degrade our ability to defend ourselves doesn't have to step foot on land. The threat isn't invasion. All they need to do is stop our fuel, food, fertiliser, ammunition and pharmaceuticals coming through the maritime domain — through some form of mining campaign or maritime interdiction — and Australia would be brought to its knees.

Now, the Defence Strategic Review in 2023 was already pivoting Australia toward a maritime strategy, toward thinking about projecting force through the maritime domain and protecting our sea lines of communication. That's why we see investments like nuclear-powered submarines. The 2024 National Defence Strategy goes further in stating it's a strategy of denial — though it's not a traditional strategy of denial, and I think, with no disrespect to the people who drafted it, it's somewhat confused on that point. Because of Australia's trade dependencies, we actually need degrees of power projection, and a traditional strategy of denial wouldn't provide that. A strategy of sea denial — the kind of approach we've seen Ukraine employ in the Black Sea, or that Iran is employing in the maritime domain right now — would not give us the freedom of manoeuvre needed to protect trade.

So while we say we have a strategy of denial, when you read the National Defence Strategy it does talk about power projection and the importance of sea lines of communication. I'm not sure it's a true denial strategy. But I do think what we'll see from NDS 2026 is more emphasis on the maritime domain and more emphasis on our dependency on maritime trade. The current fuel situation reinforces that point. There have been many reports and statements over the years about Australia's fuel dependency — and very little action. In some ways, with my strategist hat on rather than my humanist hat, Australia feeling real economic pressure from fuel shortages now may be a useful lesson to start taking resilience seriously and thinking harder about how we protect critical supply chains coming through the maritime domain.

Charlie Lyons-Jones: How well prepared is the Royal Australian Navy for protecting our sea lines of communication at present, and what sort of capabilities would it need to do that job more effectively?

Jennifer Parker: Let me talk about strategy before capability — though I groan even as I say that. But I think it's important to note that when we talk about 'national defence strategy', what that document actually represents is essentially a military strategy. A true national strategy would be a grand strategy — one that draws on all elements of national power, not just the military. Maritime strategy, in that sense, is a subset of grand strategy, not of military strategy. It is not the responsibility of the Department of Defence alone to enact Australia's maritime strategy because there are too many inputs.

If I were to outline the key elements of a maritime strategy, I'd describe it as a layered approach. The first thing is understanding your dependencies — what are the critical things coming through the maritime domain that you need to protect or maintain access to? Once you understand that, the second layer is industrial policy and stockpiling to build resilience — reducing the volume and vulnerability of what needs to come through the maritime domain in the first place. The third element involves coastguard capabilities and coastal trade. Only at the fourth layer do you really get to the Navy. I highlight this because when we discuss maritime strategy in this country, we tend to go straight to ships and submarines — which are important — but there are more layers to it, and it is fundamentally a whole-of-government issue.

On the capability question: it is clear that we do not have the capabilities in the maritime domain that we need. I would challenge anyone who's thought seriously about this to a debate at Lowy on that point. Fifty years of publicly available analysis talks about how many surface combatants we need — frigates and destroyers, the ships that project both offensive and defensive capability. We have 10. All publicly available analysis going back to the Defence of Australia review in 1986 suggests we need something like 17 to 20. And most of that analysis was done before 2020, before the Force Structure Plan and the Defence Strategic Update told us we had no strategic warning time, and before we properly contemplated the growth of China's naval capability in our region. So the answer is certainly more than 20 surface combatants — and we currently have 10. That's just maths, and it's a big problem.

Of those 10, we have three Hobart-class destroyers — very capable ships with a US combat system and US missiles. Anyone who suggested in recent weeks that those ships couldn't defend themselves in the Strait of Hormuz has never operated a combat system or fired a missile. They are very capable. The other seven are Anzac-class frigates — and despite the hard work of the women and men keeping those ships at sea, a 2019 ANAO report noted they've been used hard, and their capabilities are significantly more degraded than they should be at this stage. These ships are old, and their operational availability is affected accordingly.

How did we get here? By not making decisions in appropriate time frames. The 2009 Defence White Paper said we needed to replace the Anzac-class frigates, and we made that decision in 2018. That's a nine-year gap. As soon as you commission a ship or submarine, you should be immediately planning for its replacement.

On submarines: the same problem. We should have been making decisions about replacing the Collins class in the early 2000s. We have six Collins-class submarines, and even with six, you generally apply a three-to-one ratio — at any time, perhaps two are operational, two are in training, and two are in maintenance. Given their age, it's probably less than that. That's how we got to AUKUS.

But what we don't talk about enough when it comes to naval capability are the auxiliary capabilities. We only have two replenishment vessels. If you want ships out at sea protecting sea lines of communication, you need to keep them there — you can't send them back to port every time they need fuel and stores. With only two replenishment vessels and a three-to-one ratio, we don't have one available 365 days a year, let alone enough to sustain task groups in both the Pacific and the Indian Ocean simultaneously. And we're not even talking about the Southern Ocean, which is not a popular trade route in peacetime but would likely become one in the event of conflict in the South China Sea.

Then there's mine warfare. We used to have eight mine warfare vessels. We currently have two, both extremely old — the most recent was commissioned 23 years ago. Their replacement was included in the integrated investment programme and then scrapped. And then there's the hydrographic ship — but I won't go through the entire Royal Australian Navy. What I will say is that it is fair to conclude we have the oldest and smallest surface combatant fleet since the 1950s, and our auxiliary capabilities — mine warfare, hydrographic and replenishment — are also at fairly low levels. That is a very significant mismatch with our strategic situation.

Charlie Lyons-Jones: Well, I'm afraid that's all we have time for today. Thanks so much for joining me, Jen. You've been listening to Lowy Institute Conversations. You can find more Lowy Institute podcasts on your favourite apps, including Apple, Spotify and YouTube. Don't forget to follow and subscribe so you don't miss an episode. Thanks for listening — see you next time.