The narrow waterway between Iran and Oman has emerged as a potential flashpoint after Iranian state-owned media reported that Iran’s parliament backed closing the Strait of Hormuz, citing a senior lawmaker, though the final decision rests with the country’s national security council.
The parliamentary endorsement came just hours after the U.S. bombed three key nuclear sites over the weekend. Iranian Foreign Minister Abbas Araqchi warned that the Islamic Republic “reserves all options to defend its sovereignty,” while a senior lawmaker told the semi-official Mehr news agency that disrupting oil transit would be “the legitimate right of Iran in view of pressuring the U.S. and Western countries” if America enters the conflict with Israel.
The strait carries extraordinary importance for global energy markets. Flows through the Strait of Hormuz in 2024 and the first quarter of 2025 made up more than one-quarter of total global seaborne oil trade and about one-fifth of global oil and petroleum product consumption. The waterway, just 21 miles wide at its narrowest point, serves as the sole maritime route from the Persian Gulf to open ocean.
Secretary of State Marco Rubio on Sunday urged China to intervene, noting Beijing’s dependence on the waterway. “I encourage the Chinese government in Beijing to call them about that, because they heavily depend on the Straits of Hormuz for their oil,” Rubio said in a Fox News interview. About half of China’s waterborne crude oil imports comes from the Persian Gulf, making any disruption particularly damaging to the world’s second-largest economy.
Energy analysts warn that markets may be underestimating the potential impact. “They could disrupt, in our view, shipping through Hormuz by a lot longer than the market thinks,” said Bob McNally, founder of Rapidan Energy and former energy advisor to President George W. Bush. He suggested shipping could be interrupted for weeks or months, rather than the hours or days many traders expect.
Oil prices could shoot above $100 per barrel if the strait is closed for a prolonged period, according to Goldman Sachs and Rapidan Energy. The investment bank estimates that Iran currently produces around 3.6 million barrels per day (mb/d) of crude oil and 0.8 mb/d of condensates, with total seaborne exports averaging 2.1 mb/d so far this year—most of it heading to China.
Iran possesses several options for disrupting traffic through the strait. Naval mines have historically been one of the most immediate options Iran has for trying to bring maritime traffic in the Strait of Hormuz to a halt. The country could deploy mines using its extensive fleet of small fast attack boats operated by the Islamic Revolutionary Guard Corps, as well as its navy’s midget submarines.
During the 1980s Iran-Iraq War, both nations engaged in the “Tanker War,” attacking commercial vessels in the Gulf. Notably, even during the Iran-Iraq war in the 1980s, when both sides attacked oil tankers, the Strait of Hormuz remained open. The United States intervened with Operation Earnest Will, deploying naval forces to protect oil tanker convoys.
Asian economies would bear the brunt of any closure. We estimate that 84% of the crude oil and condensate and 83% of the liquefied natural gas that moved through the Strait of Hormuz went to Asian markets in 2024. China, India, Japan, and South Korea were the top destinations for crude oil moving through the Strait of Hormuz to Asia, accounting for a combined 69% of all Hormuz crude oil and condensate flows in 2024.
The threat faces significant practical obstacles. Closing the strait would damage Iran’s own economy, as Iran had shipped 1.5 million barrels per day via the Strait of Hormuz in the first quarter of 2025. Rubio called such a move “economic suicide” for Tehran.
Eurasia Group senior analyst Gregory Brew characterized any attempt to close Hormuz as “an effective declaration of war against the Gulf states and the US” and noted that “Iran in its weakened state is unlikely to seek escalation of that kind at this time.”
Alternative routes remain limited. Saudi Arabia and the UAE have some infrastructure in place that can bypass the Strait of Hormuz. Saudi Aramco operates a 5-million-barrel-per-day pipeline from the Persian Gulf to the Red Sea, while the UAE maintains a 1.5-million-barrel-per-day pipeline to Fujairah. However, we estimate that about 2.6 million b/d of capacity from the Saudi and UAE pipelines could be available to bypass the Strait of Hormuz in the event of a supply disruption — far below the 20 million barrels that typically transit the strait daily.
The Joint Maritime Information Center reports no current threats to commercial shipping, noting that “U.S. associated vessels have successfully transited the Strait of Hormuz without interruption, which is a positive sign for the immediate future.” The U.S. Fifth Fleet, based in Bahrain, maintains a substantial naval presence tasked with protecting maritime trade in the region.
Matt Smith, lead oil analyst at Kpler, pointed to the self-defeating nature of Iran’s threat: “It would be a self-inflicted wound: cutting off the Strait would stop the flow of its crude exports to China, halting a key revenue stream.”
The Energy Information Administration classifies the strait as the “world’s most important oil chokepoint because large volumes of oil flow through the strait”, noting that even temporary disruptions can create substantial supply delays and increase global energy prices.