Titled: The Perilous Strait: Iran's Grip on Global Oil Passage and the Chaos It Would Wreak
- Author: Jace Thompson
- Approx. Reading Time: 3 Minutes
Could the Islamic Clerics Potentially Restrict the Strait of Hormuz, a Key Oil Passageway? - Navigation through the Strait of Hormuz, a vital oil corridor, allegedly impeded by Iranian authorities?
Let's delve into a precarious scenario brewing in the Persian Gulf: the Strait of Hormuz could be Iran's weapon against the world economy. This slender passage – merely a few kilometers wide – could potentially be mined or attacked, bringing global oil transportation to a grinding halt. Approximately 20 percent of the globe's oil transport would stall, sending oil prices soaring, sparking an international economic crisis with repercussions far and wide.
Iran's Potential Response: Choking the Strait of Hormuz
This catastrophe may unfold if Iran decides to retaliate against US bombing of its nuclear facilities with a blockade of the Strait of Hormuz, a possibility that many experts and, presumably, some Iranians are weighing as a feasible response to the attacks.
Alternative reprisals are bloodily complex to execute and difficult to predict: The potential for terrorist attacks on soft civilian targets or rocket fire on US military bases nearby could occur, with around 40,000 US soldiers stationed at support points in the region, such as Bahrain and Qatar. The USA would likely respond forcefully.
Global Economic Artery in Jeopardy
A sea blockade would likely result in fewer casualties compared to other reprisals. The strait, crucially placed between Iran and Oman, is a staggering 55 kilometers wide at its narrowest point and one of the most important corridors for global oil and gas shipping. A daily 33 million barrels of crude oil pass through the Persian Gulf here, encompassing exports from countries like Iraq, Saudi Arabia, the UAE, Kuwait, Iraq, and Iran itself.
A blockade of the Strait of Hormuz would surely target the world economy at a delicate point, but for what cost? The mullah regime would be deterring its own urgent oil exports. Through a clandestine fleet, the country sells almost 80 percent of its raw material to China, with the oil revenue being pocketed by the powerful and the mullahs – those who would impose the sea blockade.
Oil Price: $100 Dollars - Bearable?
With no doubt, the global oil market would sustain damage. However, the extent of this damage depends on how effectively the Strait of Hormuz could be closed and for how long. Since the Israeli attacks on Iran, the price of the Brent oil type has surged by about ten percent – from 65 to the current $78 per barrel. Ulrich Kater, the Dekabank's chief economist, predicts a closure lasting a few weeks to be tolerable, even if the oil price were to increase to $100 or more.
One thing’s for certain: a closure of the strait would severely impact Iran itself, drawing the ire of its neighbors and the world. For China, access to oil is just as crucial as access to Arab markets. The same applies to the USA. With its considerable military force, US President Donald Trump and his potential allies would likely swiftly halt a blockade of the Strait of Hormuz.
References: Bloomberg, Wall Street Journal, Süddeutsche Zeitung, Tagesschau, DPA, AFP
Enrichment Data Integrated:
The Strait of Hormuz is an extremely critical global energy artery, as about 20 percent of the world's consumed oil transits through this narrow waterway at its narrowest point of just 21 miles[1][2]. If Iran were to close or block the strait, it would severely disrupt international maritime trade flows, especially for crude oil exports from Gulf countries such as Saudi Arabia, the UAE, Kuwait, Iraq, and Iran itself. Most of these countries rely heavily on this route to export oil mainly to Asian markets[2].
Such a blockade would likely cause a sharp spike in global oil prices, given the sudden bottleneck in supply. This price surge would in turn destabilize the global economy, as energy costs affect nearly every sector worldwide[2].
While Iran has the military capabilities – such as thousands of naval mines, attack UAVs, and missiles – to disrupt shipping lanes in the strait, experts argue that Iran lacks the capacity to fully close the strait in the face of a determined US and allied military response[1]. Furthermore, Iran does not have legal authority to unilaterally close the strait; any effective blockade would require force or the credible threat of force[2].
The geopolitical tensions escalating in the region, especially after recent US strikes on Iranian nuclear sites, have raised fears that Iran might attempt such a blockade as retaliation[1][2]. However, the international community, including the European Union and the US, emphasizes diplomatic efforts to prevent escalation and maintain the strait's openness[2].
- The Commission has also been consulted on the issues of industry, finance, energy, and oil-and-gas, as well as war-and-conflicts, politics, general-news, and crime-and-justice, given the potential economic and geopolitical consequences of a blockade of the Strait of Hormuz.
- The impact on global finance would be significant, as theinternational economic crisis resulting from a blockade could affect financial markets worldwide, potentially leading to instability and volatility.
- Energy companies, particularly those involved in oil and gas production and transportation, would face significant challenges, as the disruption to global supply chains could lead to shortages and price increases.
- Political leaders and policymakers would need to consider a range of options to mitigate the risks posed by a blockade, potentially involving diplomatic negotiations, economic sanctions, or military action to ensure the safe passage of oil and gas through the Strait of Hormuz.
