By Aakil Riyaz
A Ceasefire Written in the Sand
On 8th April 2026, the United States and Iran agreed to a two-week ceasefire, brokered by Pakistan. Both sides, however, presented narratives far removed from what had really taken place.
Iran claimed that it had forced the United States to the table, while Washington insisted that it held all the cards throughout. As is customary in Middle Eastern diplomacy, both narratives contained just enough truth to be misleading.
The backstory to the conflict however, is worth telling.
The United States and Israel launched coordinated strikes on Iran on 28th February, killing Supreme Leader Ali Khamenei, along with targeting nuclear infrastructure in the country. Tehran responded as one might expect: with missiles and drones and the closure of the Strait of Hormuz, through which roughly 20% of global seaborne oil flows every single day.
As of early May, the ceasefire holds in name only. Both sides have repeatedly violated its terms. Iran has reimposed restrictions on shipping through the Strait, and the United States has maintained its naval blockade of Iranian ports, imposed on 13th April. The diplomacy is in a state best described as aggressive ambiguity, a holding pattern that is costing the global economy dearly with every passing week.
Washington’s Negotiating Paradox
The talks between Washington and Tehran are being mediated through Pakistan, with Oman, Qatar, Turkey, and Egypt serving as useful back-channels.
The core demands on the US side are: zero uranium enrichment, restrictions on ballistic missiles, an end to Iran’s support for armed groups including Hezbollah and Hamas, and sanctions relief contingent on all of the above being verifiable.
Iran, for its part, insists enrichment is a sovereign right, and wants the blockade lifted before nuclear concessions are even discussed.
President Trump has called the US position one of holding ‘all the cards,’ while Iran’s parliament speaker described a US ceasefire extension as ‘a ploy to buy time.’ Additionally, the Arms Control Association noted that US negotiators were “ill-prepared for serious nuclear talks with Iran.”
This is, as diplomatic critiques go, a fairly significant one.
What emerges from the wreckage of the collapsed talks is this: both sides were, and remain, structurally committed to positions the other cannot accept.
The Strait is the Story
Here is the number that matters most: 20 million. That is the number of oil barrels that transited the Strait of Hormuz during normal times, linking the Persian Gulf to the Gulf of Oman and the wider Arabian Sea.
It is a passage approximately 33 kilometres wide at its narrowest point, lying between Iran and Oman, and it is the jugular vein of global energy supply. In 2024, 84% of crude shipments through the strait were destined for Asian markets. China alone receives a third of its oil via this route. Europe gets between 12 and 14% of its liquefied natural gas from Qatar through the same passage.
When Iran closed the Strait in late February, major shipping companies such as Maersk, CMA CGM, and Hapag-Lloyd suspended transits within days. By early April, approximately 230 loaded tankers were reported to be waiting inside the Gulf, unable to move. When Iran declared the strait open on 17th April, oil prices fell over 11% almost immediately.
Following this, the U.S announced its counter-blockade would remain, and effective closure resumed. Iran had also laid sea mines in the strait, meaning even a political willingness to reopen would face logistical complications of the literal, explosive variety.
The UK and France have since hosted two international conferences on freedom of navigation in the Strait, rallying around fifty countries to a joint initiative. The Strait of Hormuz has, in short, become a diplomatic theatre in its own right, turning into a growing spectacle and the show is far from over.
Project Freedom and the Limits of Force
By early May, Washington concluded that diplomacy alone was not moving the needle fast enough on the Strait. On 4th May 2026, President Trump launched ‘Project Freedom’: a US Navy operation deploying guided-missile destroyers, land and sea-based aircraft, and unmanned platforms to escort merchant ships out of the Gulf.
The operation lasted barely 48 hours before the POTUS paused it, citing “great progress” in negotiations and a request from Pakistan. In that window, only two vessels successfully transited under US military protection. The reaction from Iran was swift: Tehran’s armed forces warned that any US vessel approaching the Strait would be attacked, and the UAE reported incoming Iranian ballistic missiles, cruise missiles, and drones. A South Korean-operated cargo ship caught fire after an explosion near the strait.
Defence analysts were blunt in their assessment. The operation, they noted, did not address the underlying problem: as long as the security situation remains unresolved, shipping companies and their insurers will not take the risk, regardless of U.S naval presence.
“Until ceasefire negotiations resolve the core disputes around sanctions relief, Iran’s enrichment capacity, and security guarantees, most operators will consider Hormuz transit as extreme-risk,” one energy geopolitical analyst told CNBC. As of 8th May, roughly 1,600 vessels remain stranded in the Gulf.
Project Freedom has nonetheless hardened the contours of the negotiation. Both Iran and the U.S now face an explicit deadline of sorts: the longer the strait stays closed, the greater the economic pressure on both sides to reach an agreement.
When the Gulf Sneezes, Colombo Catches the Flu
Sri Lanka does not produce oil. It barely produces enough goodwill in international financial markets to service its debts comfortably.
It is, in the technical language of economic geography, a small, open, import-dependent economy, which is a polite way of saying it absorbs global shocks without the cushion that larger economies use to soften them. The 2022 economic crisis, triggered partly by fuel shortages, runaway inflation, and depleted foreign reserves, taught Colombo this lesson at considerable cost. What has unfolded in the Gulf since late February has begun teaching it again.
The evidence is no longer hypothetical. Within days of the Strait’s closure, Sri Lanka introduced emergency fuel rationing. By mid-March, the government had implemented a four-day workweek for public offices and schools, with Wednesdays declared a public holiday to reduce vehicle fuel consumption. Brent crude surged past $110 per barrel in mid-March, and fuel prices were raised by 8–10%, triggering immediate cost-of-living pressures across transport, food distribution, and manufacturing.
The country’s foreign reserves, rebuilt to a four-year high of $7.28 billion by February 2026, are under renewed strain. Economists warn that if oil prices sustain near $120, the annual fuel import bill could swell to $4.5–5 billion, potentially triggering a balance of payments crisis. The NUS Institute of South Asian Studies has identified Sri Lanka among the most vulnerable countries to a food price surge of around 15%, driven primarily by disrupted fertiliser flows and rising shipping costs.
Sri Lanka has sought to diversify. India supplied 38,000 metric tonnes of emergency fuel. The government is exploring Russian crude imports, taking advantage of partially eased Western sanctions. Iran offered fuel, but Colombo declined, citing a lack of appropriate transport infrastructure and, one suspects, a preference not to complicate its diplomatic positioning. The Institute of Policy Studies estimated Sri Lanka’s exposure to rising commodity prices at 39.3% of imports, or $8.3 billion based on 2025 data, with petroleum products alone accounting for $3.7 billion of that figure.
The clock, as one UN report framed it, is ticking for global food systems; fertiliser flows critical to the next planting season have been significantly disrupted. Sri Lanka, with its fragile fiscal recovery still in its early chapters, can ill afford a new wave of imported inflation.
The Colombo Port, meanwhile, sits at one of the Indian Ocean’s most strategic trans-shipment nodes. It handles a substantial share of South Asia’s container traffic. When shipping companies reroute, delay, or reprice, Colombo feels it not just at the pump but at the port. The maritime disruption is both an energy story and a trade story, and Sri Lanka is written into the plot of both.
What Comes Next for Colombo?
Sri Lanka’s response cannot be passive. The first priority is energy security planning, which includes a diversification of import sources, accelerated renewable energy deployment, and strategic fuel reserves sized for a sustained disruption scenario rather than a brief one. The government’s announcement of six new oil storage tanks, adding ten days to existing capacity, is a start, but a modest one relative to the scale of the risk.
The second is food system resilience: engaging with regional partners on fertiliser buffers and alternative supply chains before the next planting season, not after.
The third, less immediately visible but strategically critical, is articulating a maritime diplomacy posture. Sri Lanka’s location in the Indian Ocean gives it both exposure and standing. The precedent being set in the Strait of Hormuz (that a state can weaponise a global shipping lane as an instrument of war), has implications for every maritime choke point in the Indo-Pacific, including those closer to home.
The current crisis has demonstrated, with brutal clarity, that energy security and maritime security are not separate policy domains.
There is also a question of voice. Small states have historically allowed the great powers to narrate crises that affect them most acutely. The Middle East conflict of 2026 is not a story that happens to Sri Lanka but a story in which Sri Lanka is already a character, whether or not Colombo chooses to speak.
With a Memorandum of Understanding (MOU), between Washington and Tehran potentially days away, and the fate of the Strait’s governance yet to be determined, this is precisely the moment for small maritime states to make their interests known quietly, persistently, and through every diplomatic channel at their disposal.
Aakil Riyaz is a Journalist, Researcher & Communications Strategist based in Colombo. He holds a BSc in Politics and International Relations from the University of London, and is currently involved with the Sannasa Historical Research Collective. His research interests include Maritime Diplomacy & Ocean Governance in the Indian Ocean region. He can be reached at aakilriyaz@yahoo.com
Factum is an Asia-Pacific-focused think tank on International Relations, Tech Cooperation, and Strategic Communications accessible via www.factum.lk
The views expressed here are the author’s own and do not necessarily reflect the organizations.
