On Sunday, the Iranian Congress approved steps to potentially close the Strait of Hormuz, following U.S. airstrikes on three Iranian nuclear facilities. This strait is a crucial route for oil transport and its closure could have significant consequences for both the global economy and the U.S.
In multiple interviews on Sunday, Secretary of State Marco Rubio cautioned against the closure, describing it as “suicide” for the administration. He also urged China, a key client of Iranian oil, to intervene and discourage Iran from taking such measures.
“I think it would be beneficial for the Chinese government to reach out to them, considering how reliant they are on the Strait of Hormuz for their oil supply,” Rubio stated in an interview.
The final decision on this potential closure will rest with Iran’s Supreme National Security Council.
This threat comes as a response to U.S. strikes on nuclear sites in Natanz, Esfahan, and Fordau, conducted during what was termed “Operation Midnight Hammer.” While the full extent of damage remains unclear, it marked a significant military action.
According to the U.S. Energy Information Agency (EIA), the Strait of Hormuz is essential for accommodating large crude oil tankers. In 2024, about 20 million barrels—representing roughly 20% of global oil consumption—passed through this waterway.
The majority, over 80%, of oil and natural gas transit from the strait was destined for Asian markets. China, India, Japan, and South Korea would likely face the most immediate repercussions should the strait be blocked.
While the U.S. would experience some impact, particularly considering its imports of around 500,000 barrels per day from the Persian Gulf, the broader implications would likely be price increases. Global oil prices are already in flux, and experts suggest that ongoing tensions could lead to a significant rise.
Recent spikes in oil prices have occurred due to escalating conflicts involving Iran and Israel, with forecasts indicating a potential climb from about $73 to $120 per barrel if shipping through Hormuz is disrupted.
Ramanan Krishnuti, a petroleum engineering professor, mentioned, “If there’s a blockage in the Strait of Hormuz, we can expect a notable rise in oil prices, impacting everything in the U.S.”
Historically, Iran has seized tankers amid rising tensions, which raises skepticism among some analysts about whether the country will actually proceed with the closure. Many believe that such a tactic would likely provoke a swift U.S. response and could backfire on Iran’s economy.
