Recent threats by Iran have severely disrupted shipping through the Strait of Hormuz, but analysts say Tehran is unlikely to sustain a long-term blockade. Around 70% of Iran’s non-oil trade moves through ports that depend on access via the strait; shutting it would hurt Iran as much as others by cutting imports of food and other essentials and by severing the main markets for its exports.
The strait is a critical energy corridor: roughly 20% of the world’s crude oil transits it, and more than 80% of that volume is destined for Asian buyers such as China, India and Japan. A prolonged threat to passage has already pushed oil and gas prices higher and could drive crude toward $100 a barrel or more if disruptions persist. Beyond crude, the route carries large shares of aviation fuel and liquefied natural gas — about 30% of Europe’s aviation fuel and around 20% of global LNG flows use the passage — though many countries hold strategic reserves to ride out interruptions lasting several weeks.
A blockade would not only choke Gulf oil to Western markets but would also sever Iran’s access to buyers in China and India, deepening Tehran’s economic crisis. Since the 1979 revolution Iran has been subject to Western sanctions, with additional UN measures between 2006 and 2015. Sanctions eased during the 2015 nuclear deal and tightened again after the US withdrawal in 2018. Because penalties deter companies and banks that operate within the US-led financial system, Iran shifted much of its trade to partners willing to ignore or work around those restrictions — most notably China.
That shift has made China indispensable to Iran’s oil sector: data now show China taking the bulk of Iranian crude and acting as a principal buyer of sanctioned oil from Iran, Venezuela and Russia. But selling into these markets carries costs. Iran accepts deep discounts and incurs extra logistics expenses by using shadow fleets, intermediaries and longer routes, which depress net revenues. Sanctions also limit Iran’s access to modern extraction technology, international financing and foreign investment, constraining production growth over the long term.
Most analysts expect Iran to remain an active supplier in global markets, but as a structurally weakened, high-discount exporter — able to move volumes but earning less per barrel. That gradual erosion in oil-sector returns contributes to wider economic strain and adds pressure on regime stability.
This article was translated from German.