Jump to content

2025 Iran threat of Strait of Hormuz closure

Add links
From Wikipedia, the free encyclopedia

On 22 June 2025, the Iranian parliament voted to close the Strait of Hormuz, in response to U.S. strikes on Iranian nuclear facilities. The decision is pending approval by the Islamic Republic's Supreme National Security Council.[1][2] As of June 2025, the strait has never been closed during Middle East conflicts, unlike the Straits of Tiran. This is an strategic chokepoint vital for global oil trade.[3]

As of 2023, 20% of the world's liquefied natural gas and 25% of global oil consumption passed through the strait, making it a highly important strategic location for international trade.[4][5]

Background

[edit]

Iran has issued threats to close the Strait of Hormuz periodically, notably during the 2011–2012 naval tensions and again in 2019–2020.[6] The Strait links the Persian Gulf and Gulf of Oman, serving as a global energy artery: in 2024–2025, it carried over a quarter of global seaborne oil trade and about 20% of the world's LNG.[7] Major exporters, including Saudi Arabia, Kuwait, Iraq, and Iran, rely on this narrow passage for outbound oil.[8]

History

[edit]

14 June

[edit]

On 14 June, Iran reportedly issued a threat to block the strait in response to Israeli attacks targeting its military and nuclear infrastructure.[9][10] The Financial Times reported that such action could cause oil prices to surge beyond the recent 7–14% increases, possibly exceeding $100 to $150 per barrel. This would likely fuel global inflation and contribute to an economic downturn. Analysts emphasized the vulnerability of regional exporters, noting that "Saudi Arabia, Kuwait, Iraq and Iran are wholly locked into one tiny passage for exports." The Strait handles 18-19 million barrels per day, nearly 20% of global oil consumption, including crude, condensates, and fuel.[11][12] Analysts have warned that Iran could suffer severe consequences from any attempt to block the Strait. "Iran's economy heavily relies on the free passage of goods and vessels through the seaway, as its oil exports are entirely sea-based," analysts from JP Morgan explained. Closing the strait could strain Iran's crucial energy trade with China, its only major oil customer.[11][13]

17 June

[edit]

Speaking during a press conference on June 17 U.S. Secretary of State Marco Rubio also warned Iran against attempting to shut down the Strait, stating that such a move would be "economic suicide" for the Islamic Republic, as the waterway is vital for its exports.[14] On 17 June, two oil tankers collided in the Strait, though reports did not suggest that this was a security-related incident.[15] The vessels involved were the Front Eagle, carrying crude oil from Iraq to China, and the Adalynn, which was unladen and en route to the Suez Canal. Both caught fire on deck, but no oil spill occurred. All crew members aboard the Adalynn were safely evacuated by the UAE coast guard.[16]

22 June

[edit]

After the United States strikes on Iranian nuclear sites on 22 June, the Iranian Parliament voted to close the Strait.[17] A final decision rests with Iran's Supreme National Security Council.[18] Revolutionary Guards commander Esmaeil Kousari confirmed that shutting the Strait would be executed "whenever necessary", to protect national sovereignty and deter further foreign aggression.[1][2] The potential closure of the Strait, through which 20% of the world's oil supply transits, would significantly disrupt global energy markets. Such a move could cause oil prices to increase and risk destabilizing the global economy, given the Strait's critical role as a maritime chokepoint for crude oil, liquefied natural gas, and other petroleum products.[19]

23 June

[edit]

On 23 June 2025, oil prices were below $70 again (7% lower than on June 20), indicating that the oil market viewed the US strikes, and Iran's response (the Strait remaining open, and 2025 Iranian strikes on Al Udeid Air Base), as inconsequential.[20]

Oil trade flow

[edit]
Oil trade through the strait by origin and destination, 2014–2018

A 2007 report from the Center for Strategic and International Studies also stated that 17 million barrels passed out of the Persian Gulf daily, but that oil flows through the Strait accounted for roughly 40% of all world-traded oil.[21]

According to the U.S. Energy Information Administration, in 2011, an average of 14 tankers per day passed out of the Persian Gulf through the Strait carrying 17 million barrels (2,700,000 m3) of crude oil. This was said to represent 35% of the world's seaborne oil shipments and 20% of oil traded worldwide. The report stated that more than 85% of these crude oil exports went to Asian markets, with Japan, India, South Korea and China the largest destinations.[22] In 2018 alone, 21 million barrels a day were passing through the strait - this means $1.17 billion worth of oil a day, at September 2019 prices.[23]

About 20 million barrels of oil, about one-fifth of daily global production, flow through the strait every day, according to the US Energy Information Administration (EIA), which called the channel a “critical oil chokepoint.”[24][25]

As of 2023, 20% of the world's liquefied natural gas and 25% of seaborne oil trade passes through the Strait, making it a highly important location for trade.

According to the U.S. Energy Information Administration, in 2011, an average of 14 tankers per day passed out of the Persian Gulf through the Strait carrying 17 million barrels (2,700,000 m3) of crude oil. More than 85% of these crude oil exports went to Asian markets, with Japan, India, South Korea and China the largest destinations.[22] In 2018, 21 million barrels a day passed through the Strait, worth $1.2 billion at 2019 prices.[23]

Strategic Importance & Impact

[edit]

Energy and Global Trade

[edit]

In 2024–2025, roughly 17–21 million barrels per day passed through the Strait—amounting to over 20% of the world's daily oil consumption and a similar share of LNG.[26][27]

Backup routes—like Saudi Arabia's east–west pipeline (7 Mbpd) and UAE's route via Fujairah (1.8 Mbpd)—exist but cannot fully compensate.[7]

Market Reaction

[edit]

Oil prices spiked after U.S. strikes: Brent reached ~$78.50, WTI ~$75.35—nearly 2% daily increase.[28]

Subsequent de-escalation brought prices back near $67/bbl—suggesting markets judged the threat as temporary.[28]

Goldman Sachs estimated Brent could climb to $110/bbl if the Strait closure became protracted; Citigroup forecasted ~$90/bbl for short-term disruption.[29]

JP Morgan warned that closure could trigger a “sustained oil-price shock”.[30]

Shipping Sector

[edit]

Shipping activity slowed

[edit]

Bimco and vessel tracking firms reported tanker rerouting and departures paused reuters.com.[31]

Freight rates more than doubled (~$60k/day); insurance premiums increased substantially reuters.com.[31]

Potential Consequences

[edit]

Global Economy

[edit]

Energy disruption could inflate fuel costs, supply chains, and consumer prices—impacting Asia's core importers like Japan, China, India, and South Korea.[32]

Iran’s Economy

[edit]

Any closure could backfire—threatening non‑Iranian oil flow—but also Iran's own export route to China; hence experts caution against its use.[32]

Geopolitics

[edit]

A closure could provoke U.S./Allied military intervention—the U.S. Fifth Fleet stationed in Bahrain and U.S. free transit doctrines under UNCLOS would be challenged.[32]

See also

[edit]

References

[edit]
  1. ^ a b "Live: US bases used to strike Iran are 'legitimate' targets, Khamenei's advisor says". France 24. 22 June 2025. Retrieved 22 June 2025.
  2. ^ a b Cleave, Iona; Crilly, Rob; Smith, Benedict; Kelly, Kieran; Hymas, Charles; Henderson, Cameron (2025-06-22). "US-Iran attack latest: Operation Midnight Hammer inflicted 'extreme damage and destruction'". The Telegraph. ISSN 0307-1235. Retrieved 2025-06-22.
  3. ^ "Oil Prices Jump, But Middle East Oil Keeps Flowing Uninterrupted". OilPrice.com. 17 June 2025. the narrow lane has never been blocked in any previous conflict in the Middle East.
  4. ^ "Country Analysis Brief: World Oil Transit Chokepoints" (PDF). 25 June 2024.
  5. ^ "The Strait of Hormuz is the world's most important oil transit chokepoint". U.S. Energy Information Administration. 4 January 2012. Archived from the original on 11 September 2018. Retrieved 11 September 2018.
  6. ^ "Iran threatens to close Strait of Hormuz: what would happen?". Newsweek. 2025-06-19. Retrieved 2025-06-24.
  7. ^ a b "Amid regional conflict, the Strait of Hormuz remains critical oil chokepoint - U.S. Energy Information Administration (EIA)". www.eia.gov. Retrieved 2025-06-24.
  8. ^ "What is the Strait of Hormuz, and could Iran block it? – DW – 06/23/2025". dw.com. Retrieved 2025-06-24.
  9. ^ Altman, Howard (2025-06-14). "Could Iran Carry Out Its Threat To Shut Down The Strait Of Hormuz?". The War Zone. Retrieved 2025-06-15.
  10. ^ "Oil settles up 7% as Israel, Iran trade air strikes". Arab News. 2025-06-14. Retrieved 2025-06-15.
  11. ^ a b Seba, Erwin (2025-06-13). "Oil settles up 7% as Israel, Iran trade air strikes". Reuters. Retrieved 2025-06-15.
  12. ^ Tett, Gillian (2025-06-14). "Oil in the new age of volatility". Financial Times. Retrieved 2025-06-15.
  13. ^ Wearden, Graeme (2025-06-13). "Oil surges after Israel's attack on Iran, risking 'stagflationary shock' – as it happened". the Guardian. ISSN 0261-3077. Retrieved 2025-06-15.
  14. ^ "Harga Minyak Mentah Justru Anjlok 7% Usai Iran Gempur Pangkalan Militer AS". Liputan6. 24 June 2025. Retrieved 24 June 2025.
  15. ^ "Ships collide in Hormuz Strait in shadow of Israel-Iran war". Al Jazeera. Retrieved 2025-06-18.
  16. ^ "2 Kapal Tanker Minyak Tabrakan di Selat Hormuz, 24 Orang Dievakuasi". Liputan6. 18 June 2025. Retrieved 24 June 2025.
  17. ^ "Iran's top security body to decide on Hormuz closure after parliament approval". Al Arabiya English. 2025-06-22. Retrieved 2025-06-22.
  18. ^ "Parlemen Iran Sepakat Tutup Selat Hormuz Pasca Serangan Amerika?". Liputan6. 23 June 2025. Retrieved 24 June 2025.
  19. ^ "Iran to block Strait of Hormuz after US strikes. Why it matters". India Today. 2025-06-22. Retrieved 2025-06-23.
  20. ^ Sheikhlar, Shahriar (23 June 2025). "Oil Prices Crash After Iran Strikes U.S. Bases". OilPrice.com.
  21. ^ Anthony H. Cordesman (26 March 2007). "Iran, Oil, and the Strait of Hormuz" (PDF). Center for Strategic and International Studies. Archived from the original (PDF) on 19 March 2012. Retrieved 1 February 2012.
  22. ^ a b Alejandra Roman & Administration. "Strait of Hormuz". The Encyclopedia of Earth. Archived from the original on 5 April 2016. Retrieved 2 June 2015.
  23. ^ a b "The Strait of Hormuz Explained". YouTube. 31 October 2019. Archived from the original on 2021-11-17.
  24. ^ Isidore, John Liu, Chris (2025-06-23). "What is the Strait of Hormuz and why is it so significant? | CNN Business". CNN. Retrieved 2025-06-23.{{cite web}}: CS1 maint: multiple names: authors list (link)
  25. ^ "What is the Strait of Hormuz and why does it matter?". www.bbc.com. 2025-06-23. Retrieved 2025-06-23.
  26. ^ "Strait of Hormuz: The World's Most Important Oil Artery". Energy News, Top Headlines, Commentaries, Features & Events - EnergyNow.com. Retrieved 2025-06-24.
  27. ^ "Oil Markets See Closure of Hormuz Strait as Unlikely, Eni CEO Says". Energy News, Top Headlines, Commentaries, Features & Events - EnergyNow.com. Retrieved 2025-06-24.
  28. ^ a b Somasekhar, Arathy (2025-06-23). "Oil settles down 7% after Iran attacks US military base in Qatar, not tankers". Reuters. Retrieved 2025-06-24.
  29. ^ "How Trump's Iran Strikes Could Increase Gas Prices — and When". People.com. Retrieved 2025-06-24.
  30. ^ "JP Morgan Says Strait of Hormuz Closure Could Trigger a Sustained Oil Price Shock". Energy News, Top Headlines, Commentaries, Features & Events - EnergyNow.com. Retrieved 2025-06-24.
  31. ^ a b Yap, Trixie Sher Li; Liu, Siyi; Saul, Jonathan (2025-06-23). "Tankers U-turn, zig-zag, pause around Strait of Hormuz". Reuters. Retrieved 2025-06-24.
  32. ^ a b c "What is the Strait of Hormuz, and could Iran block it? – DW – 06/23/2025". dw.com. Retrieved 2025-06-24.
Retrieved from "https://en.wikipedia.org/w/index.php?title=2025_Iran_threat_of_Strait_of_Hormuz_closure&oldid=1302188281"