Story perspectives

Iran drones, Hormuz closures cost $37.5B, risk global energy crunch

7/26/2026

Summary

Story summary

The Strait of Hormuz and Bab el-Mandeb are now largely closed, choking key oil routes.
The Pentagon reports $37.5 billion spent, though the true cost is higher.
Iran’s cheap drones give it psychological leverage over shippers and insurers, reducing reliance on mines.
ExxonMobil and Chevron warn a prolonged shutdown could trigger an energy crunch threatening the global economy.
Experts cite Thomas Schelling that using threatened force weakens future deterrence.

History

Historical Context

In the 1980-87 Iran-Iraq ‘tanker war,’ Iraq’s 1984 attacks on Kharg Island led Iran to strike Kuwaiti tankers, prompting Kuwait to request U.S. protection; on 7 March 1987 the Reagan administration re-flagged Kuwaiti vessels and launched Operation Earnest Will, deploying 13 warships at a cost of about $1.6 billion. That experience shows how maritime coercion can raise oil prices, a pattern echoed today by Iran’s drones threatening Hormuz.

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Story summary

The Strait of Hormuz and Bab el-Mandeb are now largely closed, choking key oil routes.
The Pentagon reports $37.5 billion spent, though the true cost is higher.
Iran’s cheap drones give it psychological leverage over shippers and insurers, reducing reliance on mines.
ExxonMobil and Chevron warn a prolonged shutdown could trigger an energy crunch threatening the global economy.
Experts cite Thomas Schelling that using threatened force weakens future deterrence.

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