Following recent US airstrikes on three Iranian nuclear sites, Iran’s Parliament on Sunday approved a proposal to close the Strait of Hormuz. The waterway is a key maritime chokepoint for global oil trade. However, the final decision to block the waterway lies with the Supreme National Security Council.
Iran Signals Blocking Strait of Hormuz
The idea of blocking the Strait of Hormuz has gained renewed attention globally. Although experts previously believed Iran would refrain from such a drastic step, the latest US strikes appear to have altered that assessment.
When questioned about the possibility of blocking the strait, Iran’s Foreign Minister Seyed Abbas Aragchi stated, “a variety of options are available with Iran.”
US Secretary of State Marco Rubio has urged China to dissuade Tehran from shutting the waterway. Speaking on Fox News, Rubio said, “I encourage the Chinese government in Beijing to call them about that, because they heavily depend on the Straits of Hormuz for their oil. If they do that, it will be another terrible mistake. It’s an economic suicide for them if they do it.”
How Can Iran Block Strait of Hormuz?
Iran can block the Strait of Hormuz in three ways. These include mining the sea, launching missile attacks on vessels, detaining ships, or even carrying out cyberattacks. However, Iran has never fully blocked the strait, not even during the height of the Iran-Iraq war in the 1980s.
One reason for Iran’s restraint is its own reliance on the strait for trade and oil exports. A closure would damage Iran’s economy and strain its improving relations with neighboring countries, including Saudi Arabia.
Iran’s oil exports, largely discounted due to Western sanctions, are primarily bought by China. Blocking the strait would disrupt Beijing’s energy supply, hence straining ties with a key ally.
The Impact of Strait of Hormuz Closure on India
The top three importers of Iranian oil in 2024 were China, India, and Japan. The three countries together accounted for 69% of crude oil and condensate flows through the strait last year.
According to the EIA, “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.”
India, while also importing oil from Russia, the US, Africa, and Latin America, remains vulnerable to fluctuations in global prices caused by any disruption.
If China is forced to buy oil elsewhere, global demand could shift dramatically, further impacting oil markets and price stability.
The Strait of Hormuz is a narrow maritime passage that connects the Persian Gulf with the Gulf of Oman, leading into the Arabian Sea. The waterway is surrounded by key oil-producing nations such as Iran, Saudi Arabia, and the UAE.
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