The Strait of Hormuz is a narrow chokepoint between Iran and Oman — just 21 miles wide at its narrowest — but it carries nearly a fifth of the world’s oil supply. If you’re wondering why every time Iran rattles a saber the markets freak out, this is why.
Roughly 17 million barrels of oil move through this waterway every day, including exports from Saudi Arabia, the UAE, Kuwait, and Iraq. It’s also how liquefied natural gas (LNG) from Qatar, one of the biggest exporters in the world, gets to Asia and Europe.
There’s a nonzero chance (2%) that Iran decides to close it before July … but there’s also a 16% chance it closes it this year, according to Polymarket traders.
If Iran ever mined, blocked, or attacked ships in the strait — which it’s threatened to do repeatedly — the shock to oil prices could trigger global inflation, spiking gas prices overnight and dragging economies into recession. The U.S. Fifth Fleet is stationed in Bahrain in part to keep this passage open.
Put simply: If the Strait of Hormuz goes dark, the world doesn’t just get hot — it burns.
Why It Matters
It’s the most important oil chokepoint on the planet. Around 20% of global oil and 1/3 of all seaborne crude flows through here.
Who Uses It
Major oil and gas exporters:
- Saudi Arabia
- Iraq
- UAE
- Kuwait
- Qatar (for LNG)
All rely on this passage to reach markets in Asia, Europe, and beyond.
What Goes Through
Every. Single. Day.
- Around 17 million barrels of oil
- Millions of tons of liquefied natural gas
That’s trillions of dollars in fuel cruising past Iranian territory.
Iran’s Leverage
Iran borders the strait and has threatened to block it multiple times. Think war games, fast boats, mines, and missile bases. This is Tehran’s pressure point.
Global Consequences
A disruption here could:
- Spike oil prices
- Trigger inflation
- Slam global shipping
- Drag economies into recession
Markets panic whenever things heat up here — and for good reason.
U.S. and Allies
The U.S. Navy’s Fifth Fleet (based in Bahrain) runs constant patrols to keep the strait open. It’s not just about freedom of navigation — it’s about economic survival.
Past Flashpoints
- 1980s Tanker War during the Iran-Iraq conflict
- 2011 threats to close the strait
- 2019 attacks on oil tankers and drone shootdowns
Every time it flares, the whole world watches.
Can It Really Be Blocked?
Short-term? Yes.
Long-term? Unlikely — the U.S. and Gulf states would act fast. But even a threat is enough to spook the markets.
Bottom Line
If the Strait of Hormuz shuts down, the global economy bleeds. One narrow passage — holding the world hostage to geography, oil, and old grudges.
