Once again, global focus has turned to the Strait of Hormuz crisis, after renewed threats from Iran to close this strategic passage following Israeli airstrikes.
This narrow stretch of water sees over 20% of the world’s oil and a quarter of global LNG pass through daily, according to the Energy Information Administration.
The market reaction was immediate: Brent crude jumped 13% in one day, and tanker shipping rates more than doubled — a stark reminder of how fragile global energy logistics can be.
No Alternative Route
Unlike the Suez Canal, there is no viable maritime alternative for Gulf exporters. A full closure of the Strait of Hormuz would essentially cut off a major portion of the world’s energy supply, sending oil and gas prices soaring and destabilizing economies worldwide.
Who Would Be Hit the Hardest?
The fallout from a Strait of Hormuz crisis would be widespread, but some countries are particularly exposed:
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India imports 70% of its crude oil and 40% of its LNG through the strait.
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Energy-dependent industries such as aviation, shipping, and manufacturing would feel the pain of surging input costs.
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Currency pressures and inflation could spike in emerging markets reliant on affordable energy.
Why a Total Closure Remains Unlikely
Despite the rhetoric, a full shutdown of the Strait remains improbable. Here’s why:
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The strait is jointly shared by Iran and Oman, meaning vessels can often navigate without direct military confrontation.
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The U.S. Fifth Fleet, along with UK and French naval forces, actively patrols the region. Any attempt to block the strait would likely provoke a swift response.
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China, Iran’s biggest oil customer, would suffer from a blockade, reducing Iran’s incentive to escalate.
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Perhaps most critically, Iran’s own economy depends on continued exports via the strait.
A Pattern of Recurring Crises
This isn’t the first time the Strait of Hormuz crisis has loomed large. Similar tensions erupted in 2012, 2019, and most recently in 2024. Even during the infamous Tanker War of the 1980s, fewer than 2% of commercial vessels were disrupted.
And ironically, the presumed target of the escalation — Israel — imports its oil from outside the Gulf, insulating it from the immediate effects of a closure.