The Strait of Hormuz has again become the focal point of rising tensions involving Iran, the US and Israel, with energy markets reacting sharply to the prospect of disruption along one of the world’s most important maritime routes.
Iran temporarily restricted sections of the strait during live-fire exercises last Tuesday, describing the move as a safety measure. It was a rare suspension of activity and came amid heightened friction with the US following warnings from president Donald Trump that military action could be taken over Tehran’s nuclear programme.
The world’s largest warship, the aircraft carrier USS Gerald R Ford, also headed to the Middle East as part of the biggest US military build-up since the invasion of Iraq in 2003.
The strait connects the Persian Gulf to the Arabian Sea. It contains two shipping lanes, each nearly two miles wide and separated by a buffer zone, and is transited by about 3,000 vessels each month.
Bridget Payne, head of oil and gas forecasting at Oxford Economics in the UK, says the strait remains “one of the world’s most important energy chokepoints”.
“Around a quarter of seaborne oil and a fifth of global LNG shipments pass through it, mainly from Gulf producers to Asia, and most Gulf suppliers have no alternative sea route for exports,” she tells The Independent.
Payne says Saudi Arabia and the UAE can bypass the strait via pipelines, “but together they can reroute only about three million barrels a day of crude oil”. Roughly five times that volume typically transits the strait.
“The LNG risk is even more acute,” she says. “Qatar is the world’s second-largest LNG exporter, and all of its LNG exports pass through Hormuz with no alternative route. Any disruption would tighten supply quickly, both in Asia and more broadly as buyers compete for available cargoes.”
This danger has prompted several countries, including China, to call for de-escalation.
“The Persian Gulf and nearby waters are an important route for international trade in goods and energy,” Chinese foreign ministry spokesperson Guo Jiakun said.
“Keeping the region safe and stable serves the common interests of the international community.”
Beijing, he added, stood “ready to step up communication with Iran and other relevant parties to continue playing a constructive role for a de-escalation”.
US secretary of state Marco Rubio, meanwhile, warned that closing the strait would be “another terrible mistake” on Iran’s part.
“It’s economic suicide it they do it and we retain options to deal with that,” he said. “It would be a massive escalation that would merit a response.”
UK foreign secretary David Lammy also said it would be a mistake to blockade the strait, while EU foreign policy chief Kaja Kallas described it as “extremely dangerous and not good for anybody”.
Payne notes that the current phase of tensions is different. “What’s different this time is the risk of escalation alongside domestic unrest, which raises the chance that the regime feels its survival is at stake,” she says. “If it reaches that point, Iran may be more willing to take options that are costly to itself, including endangering its own exports and damaging relationships with neighbours and key trading partners by disrupting traffic through the strait.”
Dr Mudassir Qamar, an associate professor at Jawaharlal Nehru University in Delhi says the military build-up by the US and military exercises by Iran “underline that the situation can take a deadly turn if the ongoing negotiations between Iran and the US fail to reach an agreement”.
“The US has on several occasions stated that Iran should agree to a deal and stop nuclear enrichment and end its quest for nuclear weapons,” Dr Qamar points out. “This has put Iran in an extremely difficult situation with only one path to avoid a military confrontation. This is indeed dangerous.”
While Iran’s threats to shut down the strait are seen mostly as strategic signalling, Payne warns that “it’s credible signalling because Iran doesn’t need to ‘close’ the strait to have impact”.
“The more plausible operational intent is to demonstrate it can disrupt flows on a sliding scale, through interference, jamming, spoofing, harassment, or selective actions that raise insurance and shipping costs and deter some traffic,” she explains. “That kind of partial disruption can move markets quickly without the economic and political blowback of a sustained, total shutdown.”
Such a move will leave Asia reeling, according to the data and analytics firm Kpler.
Muyu Xu, senior research analyst at Kpler, tells The Independent that crude oil and condensate flows through the strait currently run at about 15 million barrels per day, with refined products adding roughly 3.3 million barrels.
“Roughly 85 per cent of these volumes are destined for Asian markets,” Xu notes.
Nearly 57 per cent of China’s seaborne crude imports come from the Middle East, 46 per cent of India’s, 93 per cent of Japan’s, and 70 per cent of South Korea’s, Kpler’s data shows.
Same is the story with LNG exposure, with roughly 27 per cent of Asian imports passing through Hormuz.
Asian economies with high dependence on imported crude and limited inventory buffers – like India, Vietnam and Thailand – will see immediate supply stress in the event of even a two-week disruption.
“The market should be and is concerned about the standoff between Iran and the US,” Kpler lead research analyst Cairan Tyler argues. “Iran alone accounts for just under eight per cent of global waterborne LPG supplies. Moreover, 27 per cent of global LPG flows move through the Strait of Hormuz. As such, any lengthy closure of the Strait or shipowners insisting vessels not enter the region would significantly tighten LPG supply in Asia.”
Gulf exporters like Iraq, Kuwait and Qatar remain structurally dependent on the strait, while Saudi Arabia and the UAE can partially reroute exports via pipelines.
According to Kpler, seven million barrels per day can be rerouted via existing alternative infrastructure, assuming full operational availability and no secondary bottlenecks, leaving some 8 million barrels per day stranded in a full closure scenario.
Meaning that while crude can be rerouted via pipelines that bypass the strait, and a small amount can shift through different ports, the overall scope to redirect flows is modest compared with the volumes that normally transit the strait.
“The annual value of crude transiting the strait is approximately $375 billion,” Xu adds, based on 2025 average Dubai benchmark prices, underscoring the economic magnitude of any disruption.
Payne notes that even slight disruptions will generate outsized effects.
“Even partial disruption can tighten prompt supply quickly and lift prices via higher freight, insurance, and delays,” she says. “It’s strategically important for gas: disruption would directly threaten Qatar’s LNG exports. Qatar is the core LNG supplier to Asia, so any interruption would tighten supply rapidly, first in Asia and then more broadly through global competition for cargoes.”
While international maritime law protects transit through strategic waterways, any deliberate obstruction risks being interpreted as an act of war. However, experts note that Tehran’s likely strategy remains calibrated signalling rather than full closure.
“Iran has military capability to disrupt, and even close the Strait of Hormuz, and it can utilise this as a military manoeuvre to put pressure on the US in case a war erupts,” Dr Qamar says. “However, Iran is unlikely to use the closure of the strait as a first move to avoid a conflict.”
