In a tense and fast-shifting geopolitical climate, Iran has threatened to close the Strait of Hormuz should the United States formally enter the war by supporting Israel. 

Though energy analysts think such a move is unlikely, they warn that a complete blockade of the strategic maritime channel would trigger an economic shock with far-reaching global consequences.

The Strait of Hormuz is a narrow waterway — just 33 km at its tightest point — that connects the Persian Gulf to the Gulf of Oman and the Arabian Sea. 

Located between Iran on one side and Oman and the UAE on the other, the strait is the world’s most critical oil choke point. But it is far more than just a vital shipping lane; it is a flashpoint in global geopolitics.

Amid rising tensions between Iran and Israel, the strait’s stability has come under renewed threat. Tehran’s warnings of a potential blockade have heightened concerns, as any serious disruption to the passage could reverberate across the global economy.

The Strait of Hormuz is vital for energy markets and crucial for energy-importing nations, as they would be hit hard in the event of an economic crisis.

Nearly one-fifth of the world’s daily oil supply, and the entire liquefied natural gas (LNG) exports of Qatar, pass through this corridor — which has come to be regarded as the artery of global energy.

“A disruption here wouldn’t just be a regional concern — it would send shockwaves across the world,” Dr Mevlut Tatliyer, a professor of economics at Marmara University in Istanbul, tells TRT World. “It’s the bloodstream of global energy. If you block the flow, the whole body weakens.”

According to the International Energy Agency, even a temporary disruption in the Strait of Hormuz could produce “severe consequences” for oil markets. 

During the Iran-Iraq war in the 1980s, repeated attacks on tankers led to global supply disruptions. While today's geopolitical calculus may be different, the stakes remain just as high.

Iran’s warning comes amid growing military tensions in the region. Experts say a closure of the strait would not only provoke a swift international military response, but also destabilise energy prices and supply chains almost instantly.

“If there’s a real and prolonged supply disruption, Brent crude could surge well beyond the $100 mark — possibly reaching $110,” Oguzhan Akyener, president of Türkiye's Energy Strategies & Politics Research Center (TESPAM) tells TRT World in an exclusive interview. 

“But if it is a short-lived skirmish — say a couple tankers are delayed or damaged — we’d expect prices to spike psychologically to $85-90 before correcting.”

Numbers that matter

Akyener provided detailed regional production figures to contextualise the threat. 

As of May 2025, Saudi Arabia produced about 9.18 million barrels of oil per day. Iraq produced 3.9 million barrels, Iran 3.3 million barrels (only 1.4 million of which are exported) and Kuwait and the UAE together accounted for around 5.3 million barrels.

Together, this amounts to over 21 million barrels daily, the majority of which are exported via the Strait of Hormuz. Even Saudi Arabia, which has an alternative pipeline to the Red Sea, can only divert about one-third of its output through that route.

“That still leaves over 17 million barrels a day passing through the Hormuz Strait,” Akyener says. “And if tensions escalate further, alternative choke points like Bab el-Mandeb could also be jeopardised, making rerouting even harder.”

Contrary to common assumptions, Europe is not the most vulnerable to a Strait of Hormuz closure when it comes to oil. 

“Asia would be hit first — China, Japan, India, South Korea, Pakistan. These economies rely heavily on crude oil and LNG from the Gulf,” says Akyener. 

“Europe, while less exposed to oil, is highly dependent on Qatari LNG. Any disruption — even speculative — drives gas prices sharply upward.”

Natural gas markets, unlike oil, are regionally fragmented, and infrastructure constraints make it harder to source gas from alternative regions quickly.

Mevlut Tatliyer warns: “When energy prices spike, it becomes a global inflation story. And when inflation rises, it affects every sector — food, transport, and manufacturing. That’s how you go from a local choke point to a worldwide economic slowdown.”

Strategic fallout

Iran, despite its threats, is likely to hesitate before triggering a full shutdown. 

“Such a drastic move would isolate Tehran diplomatically,” says Akyener. “The first and loudest objection would come from China, which depends heavily on Hormuz and remains Iran’s biggest trading partner.”

Besides, OPEC seems to be responding preemptively. The cartel has announced production increases starting in July, in what appears to be a hedging move against possible volatility.

Still, the global system remains vulnerable. Around 101 million barrels of oil are produced globally each day, and over 20 percent of seaborne oil trade passes through Hormuz. Any significant disruption would strain energy logistics, amplify insurance and freight costs, and stress diplomatic alliances.

Not just oil, petrochemicals, consumer goods and various raw materials headed towards Asia and Europe pass through Hormuz. 

A prolonged closure would disrupt shipping schedules, increase container prices, and spark inventory shortages, especially in just-in-time production industries such as electronics and automotive.

Some analysts are expecting a global GDP drag between 1 and 2 percent if the Strait of Hormuz is closed for long.

Global inflation might rise again and that could trigger a recessionary spiral.

Ultimately, the Strait of Hormuz represents far more than a narrow passage between seas — it is a lifeline of the modern global economy. While a full-scale closure remains a low-probability event, the mere possibility is enough to unsettle markets and rattle policymakers. 

With energy security, geopolitical alliances, and economic stability all tightly interwoven through this fragile chokepoint, any disruption — real or perceived — can reshape global trade patterns real fast. 

In a world already grappling with inflation, supply chain uncertainty, and shifting power dynamics, the Strait of Hormuz stands as both a symbol and a fault line of global interdependence.