Strait of Hormuz: Why It’s in the News, Iran’s Threat to Block It, and Global Impact

The Strait of Hormuz is one of the world’s most strategically important maritime chokepoints, situated between Iran and Oman. It connects the Persian Gulf to the Gulf of Oman and the Arabian Sea, serving as a vital passage for crude oil exports from the Middle East.

With only 33 km width at its narrowest point, and shipping lanes just 3 km wide in each direction, this strait is both geographically narrow and geopolitically sensitive.

Why Is the Strait of Hormuz in the News in June 2025?

The Strait of Hormuz is making international headlines due to Iran’s threat to block the passage following U.S. military strikes on Iranian nuclear sites. Iran’s Parliament has approved the closure, though the final decision rests with Iran’s Supreme National Security Council.

Key Updates:

• The conflict between Iran, Israel, and the U.S. has escalated rapidly.

• Iran’s Foreign Minister Seyed Abbas Araghchi said Iran has “a variety of options” including blocking the Strait.

• The U.S. and global energy markets are on high alert as oil prices react to the potential disruption.

Why is the Strait of Hormuz So Important?

The Strait facilitates the transport of:

• 20 million barrels of oil per day (as per the U.S. Energy Information Administration – EIA).

• About 20% of global oil and petroleum products consumption.

• Nearly 20% of global LNG trade, especially from Qatar.

Countries such as Saudi Arabia, UAE, Iraq, Kuwait, and Iran rely on the Strait to export oil. Major importers include China, India, Japan, and South Korea.

What Happens If the Strait of Hormuz Is Closed?

Global Impact:

• Crude oil prices could surge beyond $100 per barrel.

• Shipping insurance and transport costs will rise sharply.

• Global inflation could spike due to rising energy and logistics costs.

• Stock markets and trade balances would be adversely affected.

India’s Impact:

• India imports ~40% of its crude oil through the Strait.

• Disruption could impact supplies from Iraq, Saudi Arabia, and Kuwait.

• India’s alternate suppliers like Russia, the U.S., and Africa may ease shortfalls but not pricing volatility.

Iran’s Own Risk:

• Iran uses the Strait for its own exports, mostly to China.

• Blocking the strait may hurt its fragile economy and upset key allies like Beijing.

• The U.S. Navy’s 5th Fleet in Bahrain could rapidly respond militarily to reopen the channel.

Strait of Hormuz Map and Geopolitical Position

The map shows the Strait nestled between Iran (north) and Oman and UAE (south). Due to UN maritime laws, the shipping lanes pass through Iranian and Omani territorial waters, giving Iran a geographic advantage to influence traffic.

Alternative Routes to the Strait of Hormuz

Oil-exporting nations have tried to diversify routes:

• Saudi Arabia’s East-West Pipeline: Transports up to 5 million barrels/day to the Red Sea.

• UAE’s Abu Dhabi–Fujairah Pipeline: Capacity of 1.8 million barrels/day.

• Iran’s Goreh–Jask Pipeline: Still limited in capacity (~350,000 barrels/day).

These routes can only offset ~15% of the volume currently transiting the Strait.

Conclusion

As the Hormuz Strait crisis unfolds, global governments, oil markets, and businesses are bracing for the fallout. The closure of the Strait of Hormuz — if enacted by Iran — could have unprecedented economic, energy, and security consequences worldwide.

With crude oil prices rising, and Asia’s energy security at risk, diplomatic and military efforts are intensifying to keep the Strait of Hormuz open.

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