Iran Considers Closure of the Strait of Hormuz Amid Rising Tensions

In a provocative move, Iran’s parliament has reportedly approved the potential closure of the Strait of Hormuz following recent U.S. military actions aimed at its nuclear capabilities. This decision could have significant implications not just for Iran but also for global energy markets and geopolitical stability.

The fate of the strait, a critical transit route for approximately 20% of the world’s oil, now rests with Iran’s national security council. Experts warn that while Iran may perceive a closure as a show of strength, it stands to lose more by alienating its trading partners, particularly those in the Gulf.

Potential Global Impact

The closure of the Strait of Hormuz could trigger substantial increases in energy prices, with analysts predicting that gasoline prices in the U.S. could rise to between $3.35 and $3.50 per gallon, a significant spike from a national average of $3.139. This escalation in prices is particularly alarming for consumers and could impact economies dependent on oil imports.

According to the U.S. Energy Information Administration, Iran exported around 1.5 million barrels of oil daily through the strait during the first quarter of 2025. If Iran blocks this passage, neighboring oil-rich nations, including Saudi Arabia, the United Arab Emirates, and Qatar, could also face disruptions. S&P Global Commodity Insights estimates that a blockade could remove over 17 billion barrels of oil from global markets, causing feedstock shortages and affecting supply chains across Asia and Europe.

Experts emphasize that Iran’s calculations may prioritize its regional relationships over drastic actions. Vandana Hari, founder of Vanda Insights, notes that the likelihood of a complete closure remains “absolutely minimalistic.” Disruptions in oil supply could alienate major trade partners like China, which plays a pivotal role in Iran’s economy. Andrew Bishop of Signum Global Advisors echoes this sentiment, warning that any action disrupting oil supplies could “put a target” on Iran’s own oil infrastructure.

Broader Geopolitical Implications

The geopolitical landscape is further complicated by China’s dependence on stable oil flows from the Gulf. Clayton Seigle from the Center for Strategic and International Studies points out that Beijing’s national security interests hinge on the safe transit of oil and gas across this crucial waterway, making them less likely to support Iranian actions that threaten stability.

Joint Maritime Information Center reports indicate no immediate threats to commercial shipping, and U.S.-associated vessels have been able to transit the strait without interruption, suggesting a degree of resilience in maritime operations. However, should tensions escalate, Iran might resort to more aggressive tactics, such as deploying small boats for a partial blockade or mining the strait, which would significantly raise risks for all shipping traffic.

The Commonwealth Bank of Australia has highlighted that alternative supply routes are limited, with Saudi and UAE pipelines only capable of handling an additional 2.6 million barrels per day—a stark contrast to the estimated 20 million barrels moving through the Strait of Hormuz daily.

With estimates indicating a potential spike in Brent crude prices to as much as $110 per barrel should strait closures occur, the economic ramifications could resonate far beyond oil markets, affecting natural gas exports as well. Qatar’s LNG exports, which account for 20% of the global supply, may face severe disruptions, impacting energy security across continents.

The situation remains fluid, leading to broader implications for market stability and international relations, as the world watches closely to see how Iranian decisions play out in the geopolitical arena.