The United States and Israel launched an attack on Iran on Saturday (February 28), an escalation that raised the prospect of the closure of the Strait of Hormuz, the key oil shipping route at the mouth of the Persian Gulf.
Iran has repeatedly threatened to close the strait, which can interrupt a vital maritime artery carrying roughly a fifth of global oil consumption. Tehran has never fully closed the waterway, in part because doing so would prevent it from exporting its own oil and would likely trigger a swift international response.
A full closure would push oil prices sharply higher and damage the global economy. Oil already rose to multi‑month highs in February as markets reacted to the possibility of US strikes on Iran.
On Saturday, traffic through the Strait of Hormuz effectively stopped as several oil shippers and traders suspended energy shipments because of safety concerns and official warnings. “This appears to be driven by heightened tensions and precautionary decisions by ship operators and insurers rather than a confirmed physical blockade by Iran,” Jorge Leon, senior vice president and head of geopolitical analysis at Rystad Energy, wrote in a client note. “From a market perspective, however, the distinction is secondary. Whether the Strait is closed by force or rendered inaccessible by risk avoidance, the impact on flows is largely the same.”
Why the Strait of Hormuz matters
The Strait of Hormuz, between Oman and Iran, links the Persian Gulf with the Gulf of Oman and the Arabian Sea. At its narrowest the passage is just 33 kilometers (21 miles) wide, with two single‑lane shipping channels only about 2 miles wide in each direction, making it crowded and potentially hazardous.
Large volumes of crude from OPEC producers such as Saudi Arabia, the United Arab Emirates, Kuwait and Iraq transit the strait en route to global markets. Vortexa, an energy and freight consultant, estimates around 20 million barrels of crude, condensate and fuels flow through the waterway daily. Qatar also depends on the passage to export significant volumes of liquefied natural gas (LNG).
Any sustained blockade or major disruption would likely cause a sharp spike in crude prices and hit energy importers hard, particularly in Asia.
Past tensions and shipping risks
The strait drew attention during last year’s Israel‑Iran confrontation, though there were no major attacks on commercial vessels then. Still, shipowners were cautious—some increased security and others rerouted or canceled transits. Reports also noted surges in electronic interference with commercial navigation systems in and around the Gulf during that period.
Who would be most affected?
The US Energy Information Administration (EIA) estimates that 82% of crude and other fuels transiting the strait head to Asian markets. China, India, Japan and South Korea are the top destinations; together they account for nearly 70% of crude and condensate flows through the waterway. Those markets would be most vulnerable to supply shocks.
How a closure would affect Iran and Gulf states
A prolonged closure would strain Tehran’s improving ties with Gulf Arab states such as Saudi Arabia and the UAE and would be self‑defeating for Iran, which relies on the strait to export oil to partners including China.
Alternatives to the strait
Gulf producers have developed alternative export routes to reduce dependence on the strait. Saudi Arabia’s East‑West Crude Oil Pipeline can carry up to 5 million barrels per day across the kingdom from the Gulf to the Red Sea, while the UAE has a pipeline linking onshore fields to the Fujairah terminal on the Gulf of Oman. The EIA estimates around 2.6 million barrels per day could bypass the Strait of Hormuz if necessary.
Edited by: Uwe Hessler
Editor’s note: This article was first published on June 18, 2025, and updated on March 1, 2026, to reflect US strikes on Iran and the effective halt of traffic through the strait.