The closure of the Strait of Hormuz, especially with parliamentary backing in Iran, would be a geopolitical earthquake. It would unleash a global energy crisis, inflame military tensions, and provoke diplomatic firestorms across Asia, Europe, and the Americas. While Iran seeks leverage, the world stands on the brink of severe economic and security consequences.
/*The Strait of Hormuz: Strategic Lifeline of Global Energy*/
The Strait of Hormuz is a narrow waterway, approximately 167 kilometers long and just 33 kilometers wide at its narrowest point, that lies between Iran and Oman. It connects the Persian Gulf to the Arabian Sea and the broader global oceanic trade routes. With a shipping lane of only two miles in each direction and a two mile buffer zone, the Strait is considered the most critical chokepoint in the global oil and gas trade.
/*Importance of the Strait of Hormuz.*/
The Strait is vital because around 20.3 million barrels per day (b/d) of the world’s petroleum, approximately 20% of global petroleum liquids consumption, transits through it. Major oil exporting countries like Saudi Arabia, UAE, Iraq, Kuwait, Qatar, and Iran depend heavily on this route for global exports. In addition to crude oil, it is a vital pathway for liquefied natural gas (LNG), especially from Qatar, which is the world’s largest LNG exporter.
Iran has repeatedly used the threat of closing the Strait as a geopolitical tool in response to Western sanctions or military pressure. The narrowness and strategic location make it highly vulnerable to blockade or military confrontation. Even minor disruptions in the Strait lead to immediate fluctuations in global energy prices, and an official closure, especially one backed by Iran’s parliament, would have immediate and far-reaching consequences. It's important to note that while the Iranian Parliament has expressed support, the/* final decision to close the Strait rests with Iran's Supreme National Security Council*/, and a formal bill has not yet been ratified.
/*Global Oil Flows Through Hormuz. */
The Strait of Hormuz serves as a critical chokepoint for global energy supplies, with countries like Saudi Arabia, the UAE, Kuwait, Iraq, and Qatar relying almost entirely on it to export oil and liquefied natural gas (LNG). Although alternatives such as Saudi Arabia's East-West Pipeline offer some relief, their limited capacity cannot match the strategic utility of the Strait. On the other side, major oil-importing nations including India, China, Japan, South Korea, and several European Union members are heavily dependent on oil transported through this route. For example, India imports nearly 60% of its crude oil from the Gulf, while Japan sources almost 80% of its oil through the Strait. Any closure would severely disrupt supply chains, trigger fuel shortages, and cause sharp inflationary spikes in these countries.
/*The impact that countries will face.*/
84% of the crude oil and condensate and 83% of the liquefied natural gas that moved through the Strait of Hormuz went to Asian markets in 2024. China, India, Japan and South Korea were the top destinations for crude oil moving through the Strait of Hormuz to Asia, accounting for a combined 69% of all Hormuz crude oil and condensate flows in 2024,” EIA said. Out of the 5.5 million barrels of oil India consumes daily, approximately 1.5 million are transported via this crucial waterway.
He added that India will face challenges as rising oil prices lead to higher inflation. It is estimated that for every $10 increase in crude oil prices, India’s GDP could be affected by 0.5 per cent. But "Minister of Petroleum and Natural Gas of India, Hardeep Singh Puri, is confident that there is enough oil in the global market. “The oil price for a long time was between 65 and 70 (USD per barrel). Then it was between 70 and 75. Today is a Sunday. When the markets open tomorrow, the consequences of the closure of the Strait of Hormuz will be factored in. But as I've been saying for a long time, enough oil is available in the global markets".
Although the U.S. has become increasingly energy-independent due to domestic shale production, it maintains critical military and strategic interests in the Persian Gulf. A closure would not affect its oil supply significantly but would threaten its naval dominance and alliances in the region, particularly with Gulf Arab states.
/*Strait Closure: An Economic Noose for Iran. */
A full closure of the Strait of Hormuz is consistently viewed by analysts as "economic suicide" for Iran, primarily due to its direct impact on the nation's vital oil exports, with approximately 90% typically destined for China. Such a drastic action would not only cripple Iran's primary revenue stream but also severely jeopardize its recently improved relations with Gulf Cooperation Council (GCC) countries and likely alienate Oman, a crucial historical mediator between Iran and Western powers. While Iran did construct the Goreh-Jask pipeline and a Jask export terminal on the Gulf of Oman to bypass the Strait, this alternative has a maximum capacity of only 300,000 barrels per day a negligible fraction of Iran's typical daily oil exports of millions of barrels. The pipeline's reported inactivity since late 2024 (or stopped loading cargoes after September 2024, or inactive since 2021, depending on the source) further underscores Iran's lack of any viable or significant alternative for its oil exports if the Strait were to be closed. The non-functionality of this bypass pipeline directly reinforces the argument that a full Strait closure would be economically ruinous for Iran, making a sustained blockade highly irrational from an economic perspective.
China is not only heavily dependent on the Strait, importing 5.4 million barrels per day in Q1 2025, but also the primary customer for Iran's oil exports, accounting for 90% of them. This dual relationship places China in a delicate geopolitical balancing act. Notably, US Secretary of State Marco Rubio explicitly urged China to use its influence with Tehran to prevent the Strait's closure. China's diplomatic response has been nuanced: while it has condemned US attacks on Iran, it has also emphasized that regional safety and stability serve the common interests of the international community. This stance indicates a strategic balancing act between supporting its partner, Iran, and ensuring its own critical energy security. China also possesses a substantial 1.1 billion barrel oil inventory, equivalent to about 2.5 months of supply, which provides a short-term buffer against disruptions, though it is not a long-term solution for a sustained blockade. This complex interplay underscores China's role as a crucial, yet complex, player in any de-escalation efforts, as it has both a political incentive to support Iran and an overwhelming economic incentive to prevent a full closure of the Strait.
/*Global Impact of a Strait of Hormuz Closure.*/
A full closure of the Strait of Hormuz could trigger a severe global energy crisis, with crude oil prices potentially surging to $150–$200 per barrel or more. Analysts, including those from Goldman Sachs, estimate that even a prolonged partial disruption could push oil prices to $100–$120 per barrel, with worst-case scenarios hitting $150. Natural gas markets in Europe and Asia would also be heavily impacted due to halted LNG exports from Qatar and other Gulf states. The disruption would paralyze shipping routes, forcing oil tankers and LNG carriers to reroute or remain stuck, causing widespread delays and backlogs. Insurance premiums for shipping would spike amid rising risks of naval conflict and piracy. These cascading effects would significantly raise global energy costs, fueling inflation especially in developing nations that rely heavily on energy imports and potentially triggering broader economic slowdowns.