Iran’s Strait of Hormuz Closure Threat: Global Oil Supply at Risk After U.S. Strikes

On June 22, 2025, Iran’s parliament reportedly approved a proposal to close the Strait of Hormuz, the world’s most critical oil chokepoint, in retaliation for U.S. airstrikes on its nuclear facilities at Fordow, Natanz, and Isfahan. While the final decision rests with Iran’s Supreme National Security Council, the threat has sent shockwaves through global energy markets, with Brent crude prices surging over 10% to above $77 per barrel since Israel’s initial strikes on June 13. The Strait, which carries 20% of global oil and 20% of liquefied natural gas (LNG), is a lifeline for economies in Asia, Europe, and beyond. Could Iran’s move trigger an energy crisis, or is it a high-stakes bluff? Here’s a deep dive into the situation, its implications, and why a full closure remains unlikely.

The Strait of Hormuz: The World’s Oil Artery

The Strait of Hormuz, a narrow waterway between Iran and Oman, connects the Persian Gulf to the Gulf of Oman and the Indian Ocean. At its tightest point, it is 33 km wide, but shipping lanes are only 3 km wide in each direction, making it vulnerable to disruptions. According to the U.S. Energy Information Administration (EIA), the Strait handled 20 million barrels per day (b/d) of oil in 2024, equivalent to 20% of global petroleum consumption, and 90 billion cubic meters of LNG, or 20% of global LNG trade. Key exporters like Saudi Arabia (5.5 million b/d), Iraq, UAE, Kuwait, Qatar, and Iran rely on the Strait, with 84% of crude flows heading to Asia (China, India, Japan, South Korea).

A closure would spike oil prices, disrupt supply chains, and inflate shipping costs, potentially slashing global GDP by 1–2% and risking a recession. India, importing 2 million b/d through the Strait (40% of its crude and 50% of LNG), faces significant exposure, though diversified sources like Russia and the U.S. offer some resilience.

Iran’s Threat: Rhetoric or Reality?

Iran’s parliament, backed by hardline voices like Revolutionary Guards Commander Esmail Kosari, approved the closure proposal on June 22, with Kosari stating, “Closure of the Strait is on the agenda and will be done whenever necessary.” Iran’s Islamic Revolutionary Guard Corps (IRGC) Navy Commander Alireza Tangsiri warned the Strait could be closed “within a few hours.” This follows U.S. strikes on Iran’s nuclear sites, described by U.S. Defense Secretary Pete Hegseth as a “decisive blow” to Iran’s nuclear program.

However, experts argue a full closure is unlikely due to:

1. Economic Self-Sabotage: Iran exports 2.1 million b/d of oil, mostly to China, its largest trading partner, via the Strait. A closure would cripple Iran’s economy, which relies on oil for 40% of government revenue.
2. China’s Influence: China, importing 5.4 million b/d through the Strait, would pressure Iran to keep it open, as disruptions would harm its economy. Analysts like Ellen Wald note, “China does not want the price of oil to rise.”
3. Military Constraints: Iran’s arsenal includes 5,000–6,000 naval mines, 25 submarines (including Kilo and Ghadir-class), anti-ship missiles, and kamikaze drones, capable of disrupting traffic. However, the Strait’s width and depth make a total blockade challenging, and U.S. naval presence (Fifth Fleet in Bahrain) could counter Iran’s moves.
4. Historical Precedent: Despite threats in 2011, 2018, and 2019, Iran has never closed the Strait, even during the 1980s Tanker Wars, when it attacked vessels but kept the waterway open.

Posts on X reflect Iran’s rhetoric, with accounts like @IRIran_Military citing Kosari’s threat, but others, like @alon_mizrahi, suggest Iran is strategically avoiding closure to limit U.S. involvement.

Why Now? U.S. and Israeli Strikes

The current crisis stems from Israel’s Operation Rising Lion on June 13, targeting Iran’s nuclear and military sites, followed by U.S. strikes on June 22 hitting Fordow, Natanz, and Isfahan. President Donald Trump called the U.S. operation a “spectacular military success,” claiming it “obliterated” Iran’s nuclear capabilities. Iran’s Foreign Minister Abbas Araghchi condemned the strikes as a “grave violation,” ruling out diplomacy for now.

Iran’s retaliation threats include closing the Strait, withdrawing from the Nuclear Non-Proliferation Treaty (NPT), and targeting U.S., U.K., French, and German ships. However, Israel’s oil imports (220,000 b/d from Azerbaijan, U.S., Brazil) bypass the Strait, making it immune to disruptions, which analysts argue weakens Iran’s leverage.

Global Energy Markets on Edge

Since June 13, Brent crude has risen from $69 to $77 per barrel, with analysts predicting:

• Goldman Sachs: A prolonged closure could push prices above $100/b.
• Deutsche Bank: A two-month closure could hit $120/b.
• Rabobank: A worst-case scenario could reach $150/b, dwarfing the 1970s oil shocks.
• ING: Disruptions would tighten LNG markets, especially for Qatar (20% of global LNG trade), impacting Asia (80%) and Europe (20%).

India faces inflation risks, with crude on MCX potentially crossing ₹6,200 per barrel if tensions persist, though its 74-day oil reserves and non-Hormuz LNG from Qatar, Australia, and Russia provide a buffer.

Echoes of the Tanker Wars

The situation recalls the 1980s Tanker Wars, when Iran and Iraq targeted Gulf tankers. Iran attacked Saudi and Kuwaiti vessels, prompting the U.S. to launch Operation Earnest Will (1987–1988) to escort tankers. The operation ended tragically when the USS Vincennes shot down Iran Air Flight 655, killing 290 civilians. More recently, Iran seized the Advantage Sweet tanker in 2023, holding it for over a year. These incidents highlight Iran’s ability to harass shipping, but not to sustain a full closure.

Can Iran Actually Close the Strait?

Iran’s capabilities include:

• Naval Mines: 5,000–6,000 mines could halt tanker traffic for weeks, though clearing a safe corridor could take a month.
• Submarines: Kilo-class subs can lay 20 mines each, while Ghadir-class midgets carry 4.
• Missiles and Drones: Anti-ship cruise and ballistic missiles, plus kamikaze drones, could create a “missile engagement zone.”
• Small Boats: IRGC speedboats could harass vessels, as seen in past seizures.

However, challenges include:

• Geography: The Strait’s 33-km width and deep waters limit mine effectiveness, requiring tens of thousands to block it fully.
• U.S. and Allied Response: The U.S. Navy, with allies like the Gulf Cooperation Council (GCC), could neutralize threats via minesweepers, air strikes, or escorts.
• Economic Fallout: Iran’s own oil exports (2.1 million b/d) and imports would halt, risking domestic unrest.

Eni CEO Claudio Descalzi told Reuters, “It would be very difficult to stop the Strait of Hormuz, because everybody would be affected, including Iran.”

Why Iran Might Hold Back

1. China’s Pressure: As Iran’s top oil buyer (75% of exports), China would oppose a closure that spikes prices and disrupts its economy.
2. Regional Backlash: GCC nations (Saudi Arabia, UAE, Qatar) depend on the Strait and could support U.S.-led intervention.
3. Global Retaliation: A closure would likely trigger U.S. military action, as seen in past Gulf conflicts.
4. Alternative Routes: Saudi Arabia and UAE have pipelines bypassing the Strait with 2.6 million b/d capacity, though insufficient to offset a full closure.

Analysts like Gregory Brew of Eurasia Group argue, “Closing the Strait is Iran’s last big card to play,” suggesting Tehran may use it as leverage rather than act.

Implications for India and the World

• India: Despite importing 2 million b/d through the Strait, India’s diversified sources (Russia, U.S., Brazil) and 74-day reserves mitigate risks. However, price surges could fuel inflation, weaken the rupee, and hit sectors like aviation and logistics.
• Asia: China, India, Japan, and South Korea, accounting for 69% of Hormuz crude flows, face the highest exposure.
• Europe: Reliant on Qatari LNG, Europe would compete with Asia for scarce supplies, tightening gas markets ahead of winter.
• Global Economy: A sustained closure could raise insurance premiums, disrupt supply chains, and trigger a recession.

Iran’s Supreme National Security Council holds the final decision, but historical restraint and economic dependencies suggest a full closure is improbable. Tehran may opt for limited disruptions, like harassing tankers or laying mines, to pressure adversaries without inviting catastrophic retaliation. Western officials urge diplomacy, but Iran’s rejection of talks post-strikes keeps tensions high.

Energy markets remain volatile, with Brent crude projected to hit $80–$90/b if tensions persist, or $120–$150/b in a worst-case closure. The U.S. and GCC are likely preparing contingency plans, including naval escorts or strikes on IRGC assets, to keep the Strait open. For now, Iran’s threat looms as a geopolitical bargaining chip, but the risk of miscalculation remains.

Stay tuned for updates as this volatile situation unfolds!

Note: Data and sentiments are based on sources like LiveMint, EIA, and X posts as of June 22, 2025, 08:20 PM IST. Oil price projections and military capabilities are estimates and may vary.