Scott Galloway warns the Strait of Hormuz blockade could spiral into 'worldwide toll booths' — or something even worse

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Most of the attention on the Strait of Hormuz has focused on oil prices and their impact on consumers. But Scott Galloway thinks we’re missing the bigger picture.

The New York University marketing professor and cohost of the Pivot podcast published an article on Medium arguing that fast-thinking minds overlook the second-order effects of the Hormuz crisis by fixating on energy prices and market volatility (1).

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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 two-plus months since U.S. and Israeli strikes on Iran began February 28. The United Nations Conference on Trade and Development 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 an up to 30% price increase (3). Global chemical giant Dow plans to double a previously announced 15-cent-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 U.S. Postal Service 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, the largest liquefied natural gas (LNG) plant in the world. Iran attacked it early in the war, and QatarGas halted production and declared force majeure, meaning it cannot meet supply commitments due to conditions beyond its control. The country also cut exports by 14%, reports AP News (6).

About 200 helium containers, each valued at about $1 million, have been stranded in the Middle East since 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, according to AP News.

Helium cools the superconducting magnets in MRI machines. With supply tightening, Saskatchewan’s health authority confirmed to the Canadian Press that its helium allocations have been temporarily cut by 50% (7), which can affect how MRI access is rationed (8).

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 (9). That matters because helium is critical to semiconductor manufacturing, which underpins the chips powering AI infrastructure.

Read More: Robert Kiyosaki warned of a 'Greater Depression' — with millions of Americans going poor. Was he right?

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 mid-March, the Islamic Revolutionary Guard Corps has charged ship operators about $1 per barrel of oil to transit, accepting payment in Chinese yuan or cryptocurrency, reports TRM Labs (10).

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

European think tank Bruegel says the direct economic hit is relatively small — an increase in global prices of about 5 cents to 40 cents per barrel (11).

“The concept of the blue highway is going away,” Salvatore R. Mercogliano, a former naval officer and associate professor of history 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 (12).”

The toll threatens the freedom of navigation in a waterway where no toll was permitted before. Once there’s a toll and the world pays it, others may try it — potentially leading to “worldwide toll booths,” says Galloway.

Time reports the U.S. blockade could give China a legal argument to assert claims over the Taiwan Strait and South China Sea. If the U.S. can bend transit rules for national security, China could argue its own claims should override freedom of navigation (13).

The real risk

Galloway posits that the world can absorb higher prices and supply disruptions. The greater danger is a slide into what he calls “gangsterism,” where the rules‑based maritime order that has governed global trade since the 18th century gives way to strong‑arm tactics and pay-to-pass shipping lanes.

Chokepoints like the Strait of Hormuz could become political leverage. Supply chains for oil, fertilizers, semiconductors and medical devices could depend on side payments to move goods.

The Hormuz crisis already shows how a single chokepoint can affect oil prices, fertilizer, food security, chip manufacturing and MRI access. If other countries adopt the same model and impose tolls in places like the South China Sea, the Taiwan Strait, the Suez region or the Panama Canal, the consequences could ripple through the global economy.

How to prepare for stormy seas

While Galloway warns about the frightening and far-reaching implications of restricted waterways, the effect on your investments may be more personal and immediate.

However, investing in tangible, alternative assets — those with lower correlation to traditional markets — can help reduce volatility through diversification and create potential for enhanced returns.

Go for the gold

If you’re looking for a standout diversifier in tumultuous times, gold shines bright.

Long viewed as the ultimate safe haven, the yellow metal isn’t tied to any single country, currency or economy. It can’t be printed out of thin air like fiat money, and in times of economic turmoil or geopolitical uncertainty, investors tend to pile in — driving up its value.

And as a tangible asset, gold is not dependent on earnings, debt issuance or financial leverage.

One way to invest in this precious metal that can also provides significant tax advantages is to open a gold IRA with the help of Priority Gold.

Gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account — combining the tax advantages of an IRA with the protective benefits of investing in gold. This makes it an appealing option for those looking to hedge their retirement funds against economic uncertainty in 2026.

To learn more, you can get a free information guide that includes details on how to get up to $10,000 in free silver on qualifying purchases.

Diversify like the ultrarich

While volatility in traditional markets tends to pique interest in nontraditional investments like precious metals, there are other asset classes worth considering.

One such asset has posted positive returns over the last 20 years, highlighting strong long-term investment potential. And with its moderate relationship with traditional markets, this alternative investment could help protect against inflation during wartime.

It’s no wonder why this asset has long been favored by the ultrawealthy as a resilient addition to their portfolios. With an estimated value of over $2.5 trillion — projected to reach nearly $3.5 trillion by 2030 — it represents a massive asset class, according to Deloitte (14).

You might be surprised to find out this asset is fine art.

Until recently, this world was off-limits. Now, with Masterworks, you can buy fractional shares in multimillion-dollar works by icons like Banksy, Picasso and Basquiat. While art can be illiquid and typically requires a long-term hold, it offers unique portfolio diversification.

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Tap into the housing market

Real estate is another tangible asset with a long history of adding stability to investors’ portfolios.

According to the National Council of Real Estate Investment Fiduciaries, both residential and commercial real estate outperformed the S&P 500 over the 25-year period from 1996 to 2021 (15).

Today, you can access this market through real estate platforms like Arrived.

Backed by world-class investors, including Jeff Bezos, Arrived allows you to invest in shares of vacation and rental properties, earning a passive income stream without the extra work that comes with being a landlord of your own rental property.

To get started, simply browse through their selection of vetted properties, each picked for their potential appreciation and income generation. Once you choose a property, you can start investing with as little as $100, potentially earning monthly dividends.

Another great investment option? Multifamily and industrial rentals, which have a strong outlook this year (16).

Accredited investors can now tap into this opportunity through platforms such as Lightstone DIRECT, which gives accredited investors access to single-asset multifamily and industrial deals.

Lightstone DIRECT’s direct-to-investor model ensures a high degree of alignment between individual investors and a vertically integrated, institutional owner-operator — a sophisticated and streamlined option for individual investors looking to diversify into private-market real estate.

With Lightstone DIRECT, accredited individuals can access the same multifamily and industrial assets Lightstone pursues with its own capital, with minimum investments starting at $100,000.

— With files from Godwin Oluponmile

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Article sources

We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

Medium (1); UNCTAD (2); Financial Times (3); ChemNet (4); USPS (5); AP News (6); LaRonge Now (7); WJAR (8); Reuters (9); TRM Labs (10); Bruegel (11); Wall Street Journal (12); Time (13); Deloitte (14); Investopedia (15); J.P. Morgan (16)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.