China could replicate Iran's Strait of Hormuz strategy to seize economic control of the Taiwan Strait - and it would not need to sink a single ship to do it. Eyck Freymann, a Hoover fellow at Stanford University, has argued that Iran relied on insurance-driven blackmail to shut down a fifth of the world's oil supply. The same strategy, he wrote, applies directly to Taiwan - with far greater consequences.
Writing in the Financial Times, Freymann noted that Iran did not need lethal force to close Hormuz - a handful of missile and drone strikes persuaded insurers to pull coverage, and the chokepoint shut down within days, "Hvylya" reports. Beijing, he argued, is "a vastly more capable actor than Iran" that could pursue "a more sophisticated version of the same economic blackmail in the Taiwan Strait."
The mechanism is straightforward. A Taiwan crisis could begin with a unilateral legal declaration: Beijing would assert the right to control who and what enters and leaves the island. China could then fire missiles or declare exclusion zones to demonstrate resolve. The standard "Five Powers Clause" in commercial war-risk insurance terminates coverage automatically in any conflict between the United States and China - meaning private carriers would lose coverage the moment tensions spike.
Freymann posed the comparison bluntly: "If it has proved hard to persuade shipping companies to risk sailing amid a few unguided Iranian drones, imagine asking them to take on the People's Liberation Army." The choice for Washington, he wrote, would be stark - accept a new reality in which Beijing holds de facto control over Taiwan's commerce, including its chipmaking facilities, or risk escalating toward outright economic war and possibly a military conflict.
Tehran's strategy in Hormuz relies on economic attrition - betting that Washington cannot tolerate high oil prices indefinitely and will eventually back down. If that happens, Iran's Revolutionary Guards will control who transits the strait and at what price. Freymann argued Beijing would apply the same logic with far greater resources. The US and its allies, he wrote, need joint stockpiling arrangements, pre-positioned crisis logistics and a standing framework for economic crisis management - built and stress-tested before a crisis, not improvised during one.
Also read: How the Iran war exposed a critical vulnerability among America's Asian allies.