Two Oil Chokepoints Squeezed at Once: Hormuz at a Trickle, Senate Votes 100% Tariffs on Russian Oil Buyers

The pattern is familiar to anyone who watches chokepoints for a living: the quiet indicators surface first, then the headline event confirms what the data already whispered. This week, two of the world’s most consequential energy chokepoints came under simultaneous pressure — one through kinetic blockade, the other through legislative tariff — and a third alignment shift landed in between. The anomaly is not that any single one of these happened. It is that they all happened in the same week, and the S&P 500 closed at a record high anyway.

Hormuz: From 130 Crossings a Day to Eight

The Strait of Hormuz, through which roughly a fifth of global oil flows, has been effectively closed by Iran since the US-Israel war with Tehran began in February 2026.^[1] The data this week confirmed what shipping intelligence firms have been tracking for months: LNG exports through the strait have declined by 95%,^[2] and tanker transits fell to zero on August 5 according to TankerMap’s chokepoint tracker — down 100% from an already-depressed seven-day average of one vessel per day.^[2] On Friday, only eight vessels crossed, compared with pre-war levels of 130 to 140 crossings per day.^[1]

The situation on the water is not static. An ADNOC-affiliated tanker was struck by a missile while transiting the strait early on August 8 — the latest in a series of strikes on commercial shipping.^[1] The UAE, Saudi Arabia, Qatar, and Kuwait each issued statements condemning the attack, with Kuwait calling it a “blatant” violation of UN Security Council Resolution 2817.^[1] Separately, UK Maritime Trade Operations reported a vessel struck by an “unknown projectile” about 18 nautical miles off Oman’s Khasab coast.^[1]

The diplomatic track is simultaneously advancing and stalling. Iran’s Foreign Minister Abbas Araghchi said a deal with Oman on a temporary shipping route is “very close,”^[1] and Vice President JD Vance told Fox News he expects the arrangement to restore oil and gas flows to pre-war levels.^[1] But the IRGC’s spokesperson, Brigadier General Hossein Mohebi, said reopening depends on the US “fully accepting Iran’s conditions” — and that the issue is separate from the Oman negotiations.^[1] Iran is also reviewing a bill that would bar US and Israeli vessels from transiting the strait entirely, which sent oil prices surging $3 on the news.^[3]

Meanwhile, the US Navy is enforcing its own blockade of Iranian ports. CENTCOM reported redirecting 51 commercial vessels, disabling two, and boarding two others as of August 7.^[1] The US also sanctioned two crypto exchanges and a network of companies it accused of helping Iran launder billions of dollars and evade sanctions.^[1]

A quiet indicator worth flagging: Chairman of the Joint Chiefs of Staff General Dan Caine has been privately advising senior administration officials that Washington should seek an “off-ramp” from the conflict, according to CNN sources, believing further military escalation could backfire.^[1] When the top uniformed advisor is pushing for de-escalation behind closed doors while the naval blockade tightens publicly, the gap between the two signals is itself the signal.

The Senate’s 86-11 Vote: 100% Tariffs on Russian Oil Buyers

While Hormuz grips the Persian Gulf, a second chokepoint tightened in Washington. The Senate on Friday passed the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 by a vote of 86 to 11 — one of the most lopsided foreign policy votes in recent memory.^[4][5]

The bill’s core mechanism: it authorizes up to 100% tariffs on the world’s top five buyers of Russian crude oil and natural gas — currently China, India, Azerbaijan, Hungary, and Slovakia — with US Trade Representative Jamieson Greer determining the final tariff level.^[5] Countries that import less than 15% of their natural gas from Russia and are taking steps to reduce those imports are exempt.^[5]

The legislation also places mandatory sanctions on Vladimir Putin, senior Russian officials, oligarchs, state-owned enterprises, and foreign companies supporting Russia’s defense industrial base.^[4] It expands existing sanctions to cover older, reflagged oil tankers Russia uses to circumvent them, and extends the Iran Sanctions Act of 1996 — which penalizes companies investing in Iran’s energy sector — through 2031.^[5]

The bill now heads to the House, which does not reconvene until August 31.^[5] Trump has backed the package, but the gap between Senate passage and any House vote leaves a window of uncertainty — and markets that trade on the expectation of policy, not its enactment, will price that window.

The original draft, released in April 2025, set minimum tariffs at 500%.^[4] Over 15 months of negotiations, that was negotiated down to 100%, and execution authority was shifted from the president directly to USTR.^[4] Some senators — including Elizabeth Warren — expressed concern about handing the administration more tariff power at a time when Trump has already imposed sweeping duties on 60 trading partners covering 99.4% of US imports.^[4][6] An amendment by Rand Paul and Ron Wyden to strip the tariff authority was defeated.^[5]

The EU, meanwhile, adopted its 21st sanctions package against Russia on July 23, targeting energy, financial services, crypto, and trade.^[7] And on July 31, the EU extended the suspension of its own rebalancing measures against the United States — a pause that keeps the US-EU trade truce intact but does not resolve the underlying tariff structure.^[6]

A New Military Alignment: Saudi-Turkey-Pakistan Defense Pact

On the same day the Senate voted, a third signal landed. Saudi Arabia, Turkey, and Pakistan signed a trilateral defense agreement in Mecca that includes a provision treating an attack on one as an attack on all — drawing immediate comparisons to NATO’s collective-defense principle.^[8] Turkish President Erdogan, Saudi Crown Prince Mohammed bin Salman, and Pakistani Prime Minister Shehbaz Sharif signed the pact.^[8]

Turkey’s government moved quickly to clarify that the agreement “is not in contradiction with the commitments of Turkey’s existing international alliances, including those at the heart of NATO.”^[1] The Atlantic Council described the pact as a regional security deepening amid the escalating conflict with Iran,^[8] and India’s press labeled it an “Islamic NATO.”^[8] Whatever the framing, the practical effect is that three of the largest military powers in the Islamic world have formalized a mutual-defense commitment at the precise moment the Iran conflict is redefining regional alliances.

The quiet indicator here: this pact was signed while the US maintains a naval blockade of Iran and while the Saudi-Turkey-Pakistan bloc is positioning itself as a regional security actor independent of — though not opposed to — the US-led framework. If the Hormuz negotiations produce an Iranian-Omani management arrangement that the US reluctantly accepts, the question of who polices the strait afterward becomes a contest between US naval power and this new regional bloc.

Oil Prices and the Record-High Disconnect

Brent crude settled at $83.55 per barrel on August 7, up $1.06 (1.29%) on the day,^[9] but still recorded a more than 7% decline over the week.^[9] The week’s price action was a referendum on Hormuz: prices plunged earlier in the week when Trump called off planned Iran strikes and markets perceived de-escalation,^[10] then surged $3 when Iran’s Hormuz bill — targeting US and Israeli vessels — surfaced.^[3] By Thursday, Wall Street reversed again as climbing rates and rising yields signaled that investors were questioning whether the rally was justified.^[11]

Then came the July jobs report on Friday: employers unexpectedly cut 23,000 jobs,^[12] a weak enough print to push September Fed hike odds down to 38% from 50%^[11] and send the S&P 500 up 0.6% to a fresh all-time high.^[12] The Dow added roughly 0.3%,^[12] and the Nasdaq Composite also rose.^[12]

The divergence is the story. Two energy chokepoints are under simultaneous pressure. A new regional military pact has been signed. The Senate has voted to authorize 100% tariffs on the world’s largest buyers of Russian oil. And the S&P 500 closed at a record because a weak jobs number lowered the probability of a rate hike. The market is pricing the domestic rate path and discounting the geopolitical stack — a configuration that holds as long as Hormuz reopening talks progress and the House doesn’t take up the Graham Act. Both of those conditions are fragile.

What to Watch Next

• House vote timing. The House reconvenes August 31.^[5] If Speaker Johnson schedules the Graham Act quickly, the 100% tariff threat on Chinese and Indian Russian oil imports moves from hypothetical to imminent — with implications for global crude flows and the already strained tariff landscape.
• Hormuz reopening terms. Iran says a deal with Oman is “very close” but insists reopening depends on US acceptance of Iran’s conditions, including compensation.^[1] Whether the US accepts an arrangement involving joint Iranian-Omani control of the waterway — and whether the IRGC’s conditions and the diplomatic track can be reconciled — will determine if tanker traffic returns to anything approaching pre-war levels.
• General Caine’s off-ramp advocacy. The Joint Chiefs chairman’s private push for de-escalation^[1] is the kind of quiet indicator that precedes policy shifts. If it surfaces publicly — through congressional testimony or a leaked memo — it would mark a turning point in the US-Iran conflict’s trajectory.
• The Saudi-Turkey-Pakistan pact’s operationalization. A signed agreement is one thing; mutual-defense commitment is another. Watch for joint military exercises, intelligence-sharing announcements, or any incident that tests whether the “attack on one” clause is triggered.
• Oil price response to the chokepoint stack. Brent at $83.55 with a 7% weekly decline^[9] reflects a market pricing Hormuz reopening. If the talks stall or the missile strikes continue, that price is discounting risk that has not been resolved — a gap that closes fast when the narrative breaks.
• US labor data and the rate path. The weak July jobs report^[12] pushed Fed hike odds down, which is what drove equities to records. If August data re-accelerates, the rate-hike tail risk returns at a moment when oil-driven inflation pressure from the Hormuz disruption is already building — a combination that would test the market’s current complacency.

FN2 Research provides geopolitical and market analysis for educational purposes. Nothing in this article constitutes investment, trading, or policy advice.