A series of targeted attacks on commercial vessels in the Strait of Hormuz has ignited fears over the stability of the world’s most critical maritime chokepoint. As the primary artery for global energy, any disruption to this narrow passage sends shockwaves through international markets.
Recent reports from the UK Maritime Trade Operations (UKMTO) indicate that several tankers were “struck by an unknown projectile” off the coast of Iraq. Simultaneously, a container ship was reportedly hit near the United Arab Emirates (UAE) coastline, further destabilising an already volatile region.
While Tehran has threatened to “set fire” to vessels attempting to navigate the passage, a fraction of maritime traffic persists. However, with 20% of the world’s petroleum usually transiting the Strait, the conflict has already sent global oil prices soaring towards the $120 mark.
What is the Strait of Hormuz — and where is it located?
The Strait of Hormuz is widely regarded as the world’s most vital oil transit chokepoint. Geographically, it is bounded by Iran to the north and Oman and the UAE to the south.
Connecting the Persian Gulf with the Arabian Sea, the corridor is remarkably narrow—stretching only 50km (31 miles) at its widest and tapering to just 33km at its narrowest point. Despite its limited width, the channel is deep enough to accommodate the world’s largest crude oil tankers (VLCCs), making it indispensable for Middle Eastern energy exporters and their global customers.
In 2025, an estimated 20 million barrels of oil passed through the Strait daily, according to the US Energy Information Administration (EIA). This represents nearly $600bn (£447bn) in annual energy trade, involving exports from Iran, Iraq, Kuwait, Qatar, Saudi Arabia, and the UAE.
What would be the impact of a total blockade?
Under normal conditions, approximately 3,000 ships navigate the Strait every month. Analysts warn that persistent threats to these vessels will inevitably drive up the cost of oil and maritime insurance.
”It is de facto closed in that no one dares to go through,” Arne Lohmann Rasmussen, chief analyst at Global Risk Management, told CBS News. “You can be attacked, and you can’t get insurance or it is extremely expensive… If oil and gas coming from the strait is cut off, that has significant ramifications for the market.
Rasmussen noted that even without a physical blockade, the combination of Iranian threats and drone strikes means many shipowners are simply refusing to enter the Gulf. This sentiment was echoed by Esmail Baghaei, a spokesman for Iran’s foreign affairs ministry, who cautioned that tankers “must be very careful.”
The economic fallout is already visible:
- Surging Prices: Crude oil prices saw massive swings recently, hitting nearly $120 before a slight retreat.
- Shipping Costs: Data from the London Stock Exchange Group shows the cost of hiring a supertanker from the Middle East to China has nearly doubled, reaching a record high of over $400,000 (£298,300).
- Regional Damage: Even oil-rich nations like Saudi Arabia are suffering as their export-dependent economies face logistical paralysis.
The Asian Connection: Why China is Watching
A blockade would hit Asian economies hardest. In 2022, roughly 82% of crude oil and condensates leaving the Strait were destined for Asia. China, which buys an estimated 90% of Iran’s total oil exports, is particularly vulnerable. Because China serves as the world’s manufacturing hub, a spike in their energy costs would likely lead to higher prices for consumer goods globally.
How could Iran physically close the Strait?
International maritime law allows nations to exercise control over territorial seas up to 12 nautical miles from their coast. At its narrowest, the Strait’s shipping lanes fall entirely within the territorial waters of Iran and Oman.
Military experts suggest Iran’s most effective strategy would be naval mining. By using fast attack craft and submarines to lay mines, they could effectively deny access to the channel. While the US military has reported “eliminating” 16 Iranian mine-laying vessels, the threat remains high from Iran’s regular navy and the Islamic Revolutionary Guard Corps (IRGC).
However, a full-scale naval confrontation poses risks for Tehran. Large surface vessels are vulnerable to US air strikes, and the current US administration has signaled a willingness to use military force to re-establish traffic flow—reminiscent of the “Tanker War” in the late 1980s.
Are there alternative export routes?
To mitigate the risk of a Hormuz closure, Gulf states have invested in bypass infrastructure:
- Saudi Arabia: Operates a 1,200km pipeline with a capacity of 5 million barrels per day.
- The UAE: Utilises a pipeline connecting inland fields to the port of Fujairah, bypassing the Strait entirely with a 1.5 million barrel daily capacity.
While these routes provide a safety net, they cannot fully replace the Strait. Diverting oil through this infrastructure would still result in a global supply deficit of 8–10 million barrels per day, ensuring that even with alternatives, the closure of Hormuz would remain a global economic catastrophe.
