US–Iran tensions continue to escalate, and global attention has again focused on the Strait of Hormuz, the maritime chokepoint. With the US nuclear-powered aircraft carrier USS Gerald R. Ford sailing toward the Gulf and an aggregation of the largest military force since the 2003 Iraq War, Iran this month staged rare live-fire military exercises and briefly closed parts of the strait, sending Washington a clear warning: if the United States resorts to force, the global energy market will be hit first. Media outlets around the world have published in-depth analyses unpacking the strategic importance of this critical energy route and how a shutdown would jolt the world economy.

▍Global oil lifeline: about 20 million barrels of crude transported daily

The Strait of Hormuz lies between Iran and Oman and the United Arab Emirates. At its narrowest point it is only about 33 kilometers wide, yet it is the world’s most important oil throat. According to the U.S. Energy Information Administration, roughly 20 million barrels of crude oil transit the strait each day in 2024 — about 20% of global oil supply — with annual energy trade worth nearly $500 billion.

Al Jazeera notes that crude moving through the strait comes from Iran, Iraq, Kuwait, Qatar, Saudi Arabia and the UAE. Any prolonged disruption would hit these producers and importing economies that rely on them.

The strait is also critical to liquefied natural gas (LNG) trade. About one-fifth of global LNG shipments in 2024 passed through the Strait of Hormuz, most of them originating from Qatar.

▍CCTV: the “person-shaped” oil gateway

Data from China Central Television shows the Strait of Hormuz is situated between the Arabian Peninsula and southern Iran and resembles the Chinese character for “person” (人); it is the Persian Gulf’s only exit to the Indian Ocean. This waterway handles nearly 40% of global oil exports, with an oil tanker passing every five minutes on average. Besides crude, roughly 2 million barrels per day of fuel oil, LNG and other petroleum products also transit the strait.

The report says that blocking the strait is Iran’s trump card. Iran’s navy commander has said Tehran has the capability to close the Strait of Hormuz. Flexible strategy and tactics give Iran’s small surface attack craft an advantage in this narrow waterway and limit the power of larger warships. Mines, fast boats and submarines are Iran’s three main weapons.

But a closure would be a double-edged sword for Iran. Its economy is heavily dependent on oil exports; a blockade would inflict severe damage on the national economy and reduce resources available to sustain conflict. CCTV’s analysis suggests a closure might briefly delay a U.S. attack but would also inflict heavy damage on Iran itself.

▍Asian economies hanging by a thread: China, Japan, South Korea and India highly dependent

Combined media analysis shows that in 2024, 84% of crude and condensate shipped through the Strait of Hormuz went to Asian markets; 83% of gas trade was also destined for Asia. China, India, Japan and South Korea together accounted for 69% of last year’s oil flow through the strait. Factories, transportation networks and power systems in these countries depend on uninterrupted energy supplies from the Gulf.

About half of India’s crude imports and roughly 60% of its gas supplies transit the strait; South Korea gets about 60% of its crude via the strait, and Japan relies on the strait for nearly three-quarters of its crude imports.

▍Iran’s legal cards and military options

Under international law, coastal states exercise sovereignty out to 12 nautical miles (about 22 kilometers) from their coastlines. The designated shipping lanes at the Strait of Hormuz’s narrowest point lie entirely within the territorial waters of Iran and Oman, which, Al Jazeera writes, gives Tehran a geographic strategic advantage.

If Iran attempts to interdict shipping, one of the most effective tactics would be deploying mines from fast attack craft and submarines. Iran’s fleet includes fast boats armed with anti-ship missiles, surface ships, semi-submersible vessels and submarines designed for asymmetric warfare. Iran’s parliament approved a motion last year to close the Strait of Hormuz; the final decision rests with Supreme Leader Ali Khamenei.

Regional dynamics make the situation more complex. The Houthi movement in Yemen, an Iranian ally, attempted to disrupt traffic in the Bab el-Mandeb Strait after the October 2023 Israel–Gaza war, which connects the Red Sea with major trade routes and is another critical chokepoint. The Houthis recently organized large rallies with the slogan “steadfast and ready for the next round,” indicating readiness to confront internal and external opponents. Simultaneous pressure on the Strait of Hormuz and the Bab el-Mandeb would deliver a double blow to global shipping, energy markets and international trade.

▍Oil could top $100 a barrel — experts warn of severe inflation risks

Middle East content head at an energy intelligence firm, Connelly, told Al Jazeera that a full or partial closure of the Strait of Hormuz would produce “a significant short-term impact” on oil prices, depending on how long disruptions last. “There is no other major supply source that can replace Gulf output, especially given that about 70% of OPEC+ idle capacity is in the Gulf,” he said.

Saudi Arabia exports roughly 5.5 million barrels per day through the strait and is the largest user; Iran exports about 1.7 million barrels per day, about 90% of which goes to China. Connelly warned that although Saudi Arabia and the UAE have limited pipeline routes along the Red Sea coast and via Fujairah to continue exports, those buffers could be limited during severe disruption. He cautioned: “Oil prices have been highly sensitive to geopolitical tensions in recent weeks; if a major disruption occurs, prices could surge well beyond $100 per barrel.”

James Ramani, a research fellow at the Royal United Services Institute, warned that an energy disruption would raise fuel and manufacturing costs and trigger “severe global inflationary effects.” China, reliant on manufacturing and exports for economic growth, would be among the first to feel the impact; companies are likely to pass higher costs on to consumers.

Ramani added that the effects would go beyond exports and prices: “I was recently in the UAE, and investors in Dubai are worried about the impact on tourism and finance, and Saudi Arabia’s Vision 2030 projects could face investment obstacles. This touches many layers of concern, including macroeconomic and microeconomic consequences — we should treat it as a very serious negative financial development.”

by The Logistic News