Scott Galloway warns the Strait of Hormuz blockade could spiral into 'worldwide toll booths' — and that isn't even the nightmare scenario

The slower, more deliberate view of the problem, he writes, is far more alarming.

“Let’s slow down and think about the second-order effects stemming from a world without freedom of navigation,” he writes

The essentials are harder to access

The Hormuz closure has lasted for most of the eight weeks since U.S. and Israeli strikes on Iran began February 28. The United Nations Conference on Trade and Development (UNCTAD) says rising energy prices are feeding into supply chains, affecting production and trade (2).

But Galloway notes there is more. Karex, which makes a fifth of the world’s condoms, announced a 30% price increase (3). Dow plans to double a previously announced a 15-cents-per-pound price hike for polyethylene, used to make bottles, bags, tubing and textiles, on top of a 10-cent boost in March (4). And the United States Postal Service also announced a temporary 8% surcharge on packages, meaning nearly everything ordered online costs more to ship (5).

The Strait’s closure has ripple effects on almost every consumer product, even those unrelated to oil. Galloway points to a looming helium shortage that has largely gone unnoticed.

Qatar produces roughly one-third of the world’s commercial helium at its Ras Laffan complex, one of the largest LNG facilities in the world (6). Iran attacked it early in the war, and QatarEnergy halted production and declared force majeure, meaning it cannot meet supply commitments due to conditions beyond its control. The country also cut exports by at least 14% (7).

About 200 helium containers, each valued at about $1 million, were repeatedly stranded in the Gulf after Ras Laffan operations were disrupted. The containers are insulated but not refrigerated, so the helium can boil off within 35 to 48 days if it is not shipped (8).

Helium cools the superconducting magnets in MRI machines (9). With supply tightening, Saskatchewan’s health authority confirmed to the Canadian Press that its helium allocations have been cut by 50% (10), affecting how MRI access is rationed (11).

In South Korea, companies like Samsung and SK Hynix, among the world’s top memory chip makers, have enough helium to last only through June, according to Reuters (12). That matters because helium is critical to semiconductor manufacturing, which underpins the chips powering AI infrastructure (13).

The toll booth problem

The strait is not completely shut, but Iran has created a de facto toll system where free passage once existed. Since early April, the Islamic Revolutionary Guard Corps has charged ship operators about $1 per barrel of oil to transit, accepting payment in Chinese yuan or cryptocurrency (14).

A fully loaded tanker carrying two million barrels of crude would have to pay a $2 million fee. TRM Labs estimates (15) the system could generate $20 million per day from oil tankers alone, or $600 to $800 million per month, including LNG vessels.

The Brussels-based think tank Bruegel says the direct economic hit from is relatively smal, about 5 cents to 40 cents per barrel on global prices (16).

“The concept of the blue highway is going away,” Salvatore R. Mercogliano, a maritime historian and former naval officer at Campbell University, told the Wall Street Journal. “We won’t see a return to the normalcy we had prior to this no matter what (1).”

The toll threatens the freedom of navigation in a waterway where none was permitted before. Once there’s a toll booth and the world pays it, others will definitely try it.