Most recently, Iran’s parliament has expressed its support for shutting the Strait of Hormuz. Iranian state media has hailed the importance of this waterway to global oil supplies. This decision has raised fears over significant and immediate interruptions in the flow of oil. As of 2024, that was nearly 20 million barrels per day—approximately 20% of global oil consumption—flowing through the strait. The Energy Information Administration shared these sobering statistics, reinforcing the strategic significance of this important maritime artery.
The Strait of Hormuz is the major transit route for Iranian oil exports. It enables oil deliveries to other countries including China. In reality, almost 50 percent of China’s waterborne crude oil imports come from the Persian Gulf through this strait. Any bid to close it would face serious ramifications for international oil supplies and economic security.
As we discussed in a recent opinion piece, U.S. Secretary of State Marco Rubio has already threatened Iran with severe consequences for such provocations. Even pointing out a couple weeks ago that closing the Strait of Hormuz would be “economic suicide” for Iran. Such a move would likely spark major economic consequences for Iran, as well as reciprocal punishment from other countries reliant on the strait to ship their oil.
“We retain options to deal with that” – U.S. Secretary of State Marco Rubio
Rubio urged China to use its growing power in the region to deter Iran from seeking closure. He warned that the impact of such an action would be catastrophic. It would almost certainly set off a concerted retaliation from other nations.
Yet ultimate authority over the decision to close the Strait of Hormuz lies with Iran’s national security council. They hold the ultimate responsibility for deciding what should happen. The Iranian Revolutionary Guard, for their part, has released ominous threats. They argue that U.S. military bases in the region are vulnerable and assert that Iran should be able to respond violently when its sovereignty is endangered.
“The US bases in the region are not their strength but rather their greatest vulnerability” – Iran’s Revolutionary Guard
These advancements have occurred amid a recent spike of violence and tension in the region. The Strait of Hormuz has served as a flashpoint in U.S.-Iranian relations before. After the 2019 attacks on Saudi Arabia’s oil facilities, the U.S.—along with allies France, Germany, and the Netherlands—mobilized reinforcements to increase the military footprint in the region.
The International Energy Agency’s chief, Fatih Birol, confirmed that the agency is closely monitoring the situation surrounding the Strait of Hormuz. As the specter of major supply disruptions becomes more immediate, participants in the global oil market must stay vigilant […]