The Strait of Hormuz, a narrow 33-kilometer-wide waterway linking the Persian Gulf to the Gulf of Oman and the broader Arabian Sea, is the world’s most critical oil transit route. This vital chokepoint facilitates the passage of roughly 20% of global oil production—approximately 21 million barrels per day—and nearly a third of the world’s liquefied natural gas (LNG). Recent escalations between Iran and Israel, coupled with Iran’s renewed threats to block the strait, have raised alarms about potential disruptions to this lifeline, which could destabilize global energy markets and economies.
The Strategic Significance of the Strait
Nestled between Iran to the north and Oman to the south, the Strait of Hormuz is a geopolitical and economic linchpin. At its narrowest point, the strait is just 21 nautical miles wide, with two 3-kilometer-wide shipping lanes for inbound and outbound traffic. These lanes handle oil and gas exports from major producers like Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, Iraq, and Iran. In 2024, the U.S. Energy Information Administration reported that 21.2 million barrels of crude oil and refined products flowed through the strait daily, accounting for a significant share of global energy trade. Qatar, the world’s leading LNG exporter, relies on the strait to supply gas to markets in Asia and Europe.
The strait’s narrow geography makes it uniquely vulnerable. Large tankers, often carrying over a million barrels of oil, must navigate tightly packed lanes, leaving little room for error. Any disruption—whether through blockades, naval mines, or attacks—could halt shipments, sending shockwaves through energy-dependent economies like China, India, Japan, and Europe.
Iran’s Escalating Threats
Tensions in the region have intensified following Israeli airstrikes on Iranian military and energy infrastructure in early June 2025. In response, Iranian officials have issued warnings about closing the Strait of Hormuz as a retaliatory measure. On June 15, 2025, Iran’s Foreign Ministry indicated that its parliament is considering legislation to withdraw from the Treaty on the Non-Proliferation of Nuclear Weapons (NPT), signaling a broader escalation. Hard-line Iranian media outlets and lawmakers have openly called for blocking the strait to pressure Israel and its Western allies.
Iran has a history of leveraging the strait as a geopolitical tool. During the 1980s “Tanker War” with Iraq, both sides targeted vessels in the strait, disrupting oil flows. In 2019, Iran was accused of attacking tankers near the strait, though it denied responsibility. More recently, on June 18, 2025, two oil tankers caught fire near the strait after a reported collision, raising fears of deliberate interference amid the ongoing conflict. While the cause remains under investigation, the incident highlights the strait’s fragility in times of tension.
Global Economic Stakes
A closure of the Strait of Hormuz would be catastrophic for global energy markets. Analysts estimate that a full blockade could drive oil prices above $150 per barrel, doubling or tripling current levels. This would spike fuel costs, disrupt supply chains, and exacerbate inflation worldwide. Asian nations, which import 70% of the oil passing through the strait, would face severe shortages. India, for instance, relies on the strait for nearly 60% of its crude oil imports, while China and Japan depend heavily on Gulf oil and Qatari LNG.
Even a partial disruption could have dire consequences. Iran has an estimated 5,000 to 6,000 naval mines, which could be deployed to render the strait impassable within days. Such actions would deter insurers from covering tankers, effectively halting traffic as shippers avoid the risk. During the 2019 tanker attacks, insurance premiums for vessels in the region surged, demonstrating the economic ripple effects of even limited incidents.
Iran’s Calculus and Global Responses
Despite its threats, Iran faces significant risks in closing the strait. The country relies on the waterway to export its own oil, primarily to China, which accounts for over 90% of its crude sales. Blocking the strait would cripple Iran’s economy and alienate key allies like China. Additionally, the U.S. maintains a robust naval presence through its Fifth Fleet in Bahrain, tasked with securing the strait. Gulf Arab states, including Saudi Arabia and the UAE, also have a vested interest in keeping the strait open, as their economies depend on oil exports.
Alternative routes, such as Saudi Arabia’s East-West Pipeline or the UAE’s Habshan-Fujairah Pipeline, could bypass the strait but have a combined capacity of only 2.6 million barrels per day—far below the volume needed to replace Hormuz’s throughput. In response to recent threats, India has deployed naval escorts under Operation Sankalp to protect its vessels, while the U.S. and its allies have increased patrols in the region.
Recent Incidents Heighten Concerns
Beyond the tanker fire on June 18, 2025, other incidents have underscored the strait’s vulnerability. Over the weekend of June 14-15, navigation signals from more than 900 vessels in the Persian Gulf and Strait of Hormuz were disrupted, causing confusion and raising suspicions of electronic warfare. While no group has been definitively linked to the incident, it aligns with the escalating Israel-Iran conflict. Oil prices, already volatile, climbed to $76 per barrel following Israel’s strikes, reflecting market jitters.
The Path Forward
The Strait of Hormuz remains a flashpoint in a region fraught with tension. Iran’s threats to close the strait may be a calculated move to project power and deter further Israeli or Western actions, but the risks of escalation are immense. A blockade would not only harm Iran’s own interests but also provoke a military response from the U.S. and its allies, potentially sparking a wider conflict. For now, global powers are focused on diplomacy and deterrence to keep the strait open, but the world remains on edge, aware that any miscalculation could choke off this critical energy lifeline.
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