If you filled up your tank in the United States this week and noticed the price was higher again, you were reading a fairly direct signal from the Strait of Hormuz. Brent crude closed up roughly six per cent at $118.03 a barrel on 29 April. West Texas Intermediate, the US benchmark, closed up about seven per cent at $106.88. The Energy Information Administration’s April Short-Term Energy Outlook expects retail gasoline in the United States to average about $4.30 per gallon for the month and to come in above $3.70 a gallon for 2026 as a whole. The trigger for the 29 April move was a single statement: President Trump said the United States naval blockade of Iranian ports would continue until Iran agrees to a new nuclear arrangement.
This post tries to answer a question that is not quite the one the headlines answer. The headlines explain why the price went up. The question worth asking is what part of that price is the chokepoint, and what part of it is something the chokepoint could have absorbed and didn’t. The answer is mostly not what people assume.
Walking a gallon back to the tanker
A fully loaded Very Large Crude Carrier transiting Hormuz carries roughly two million barrels of crude oil. Two million barrels is approximately eighty-four million gallons. If you take the cost stack the site documented on 23 April, where a single Hormuz transit currently sits in the six-to-ten million US dollar range once you add up war-risk premiums, fuel surcharges, hull and machinery cover, the toll receipts the Iranian Revolutionary Guard Corps is collecting, and the slow-steaming and rerouting frictions on top, and you spread that across the eighty-four million gallons of crude on board, the per-gallon cost of getting that crude through the strait under present conditions is around nine to twelve cents.
The same VLCC, priced against the schedule the site proposes for a treaty-backed Hormuz transit authority, would pay a fee in the four-to-six hundred thousand US dollar range. Spread across the same eighty-four million gallons, that comes out to about half a cent to three-quarters of a cent per gallon. You can verify those numbers against your own assumptions by running a transit through the site’s calculator.
So the direct chokepoint cost difference, walked all the way back to the pump, is on the order of nine cents a gallon. That is not, in itself, the reason gasoline crossed four dollars.
The premium that does the work
The larger driver is something less visible than the per-transit fee. It is the premium that crude oil carries in its global price because the chokepoint is unstable. Brent traded in the high sixties and low seventies a barrel before the war began on 28 February. It is now trading at one hundred eighteen. The forty-five-to-fifty-dollar spread is what the market is paying for the possibility, on any given week, that the strait will tighten further, that a vessel will be seized, that a sanctions action will reach a new tier, that a counter-blockade will extend, or that the IMO’s safe-passage mechanism will or will not reach operational status.
A forty-five-dollar premium on a barrel of crude is roughly one dollar and seven cents a gallon at the pump, before refining margins and taxes. That is the number doing the work in the move from a $3-a-gallon world to a $4-a-gallon world. The chokepoint fee is small. The chokepoint risk is what is showing up in the strip.
What a treaty actually changes
The thesis of this site is not that a treaty-backed Hormuz transit authority would lower the toll. The proposed schedule on the rates page is calibrated to recover institutional cost on the model of the Suez Canal Authority’s tariff and to fund a working harbourmaster, traffic management, dispute resolution, and statistical bulletin. The toll itself is, in absolute terms, modest at the per-gallon level. What a treaty changes is the premium.
The Suez and Panama transit corridors do not carry a forty-five-dollar-a-barrel risk premium because they are institutionally boring. There is a published schedule. There is a recognised authority. There is dispute resolution. There is a treasury whose receivables can be relied on. The market does not need to price the option that those institutions might collapse next week, because the institutions are stable. The comparison page walks through the structural differences in receivables and recognition between the two existing authorities and what a Hormuz authority would need to look like.
The seafarer-welfare situation set out in the earlier post from today on the twenty thousand stranded crew is the human-cost reading of the same institutional gap. The pump price is the consumer reading. They are the same reading, taken from two different angles.
The honest summary
If you are paying a dollar more per gallon than you were two months ago, the chokepoint toll itself accounts for a small slice of that, perhaps eight to ten cents, and a treaty-backed authority would compress that small slice to a cent. The remainder of the dollar increase, roughly ninety to ninety-five cents, is the global crude premium that exists because the chokepoint is unstable. A treaty does not by itself open the strait. It does not lower oil prices on the day it is signed. What it does is remove the institutional condition under which the strip prices a multi-week disruption probability into every barrel that moves through Hormuz, which over time is the dominant component of what you pay at the pump.
The thirty-five per cent of seaborne crude oil that passes through Hormuz on a normal day is the structural reason a single statement about the blockade can move the global price strip by six per cent. There is no other waterway in the global oil system where one country’s policy posture, made on a single afternoon, has that kind of leverage. That is why the institutional question is not academic. It is what your fill-up costs.
Sources: CNBC reporting on 29 April 2026 Brent and WTI closes at $118.03 and $106.88 respectively; US Energy Information Administration April 2026 Short-Term Energy Outlook on retail gasoline price forecasts; World Bank Commodity Markets Outlook, April 2026, on the largest energy price surge in four years; this site’s earlier cost-stack analysis from 23 April 2026; Suez Canal Authority and Panama Canal Authority published tariff schedules and audited statements; site’s proposed rate schedule and calculator.