Bold statement: The world’s oil lifeline is under strain, and the ripple effects could touch prices you pay at the pump and in energy bills. But here’s where it gets controversial: some analysts warn this familiar chokepoint could soon tighten beyond anything seen since 2022.
Oil prices surged as conflict widened in the Middle East, disrupting tanker traffic through the Strait of Hormuz and underscoring how pivotal this narrow passage is to global energy supplies.
The Strait of Hormuz, a slender channel at the mouth of the Persian Gulf, handles roughly one-fifth of the world’s oil. Tankers traversing this chokepoint carry crude and gas from Saudi Arabia, Kuwait, Iraq, Qatar, Bahrain, the United Arab Emirates, and Iran. Most of that oil heads toward Asia.
Any interruption in Hormuz traffic sends shockwaves through the oil market.
"The scale of what is at stake cannot be overstated," said Hakan Kaya, a senior portfolio manager at Neuberger Berman. He noted that a partial slowdown lasting a week or two could be absorbed by producers, but a full or near-full closure lasting a month or more could push crude prices well into triple digits and drive European natural gas prices toward or above crisis levels seen in 2022.
Key facts about the strait and the widening Iran conflict follow.
A critical artery for global shipping
The Strait of Hormuz is a curved waterway about 33 kilometers (21 miles) wide at its narrowest point, linking the Persian Gulf to the Gulf of Oman. From there, ships can reach the rest of the world. While Iran and Oman assert territorial waters in the strait, it is widely regarded as an international waterway open to all ships. The United Arab Emirates, home to Dubai, sits adjacent to this vital route.
The strait has long been central to trade. Historically, it moved ceramics, ivory, silk, and textiles from China through the region. In modern times, it serves as the route for supertankers carrying oil and gas from Saudi Arabia, Kuwait, Iraq, Qatar, Bahrain, the UAE, and Iran, with the bulk headed to Asian markets, including China, which remains Iran’s last major oil customer.
Although Saudi Arabia and the UAE operate pipelines that can bypass Hormuz, the U.S. Energy Information Administration notes that most volumes passing through the strait have no viable alternative exit from the region.
Threats to Hormuz have previously boosted energy prices, including during notable conflicts such as the Israel-Iran tensions in June.
Is the strait closed?
The strait is not officially closed, but tanker traffic has fallen sharply as satellite navigation and other data services face disruption. The U.K. Maritime Trade Operations Center has reported attacks on vessels near the strait and warned of elevated electronic interference affecting ship-tracking systems.
A bomb-carrying drone boat struck a Marshall Islands-flagged tanker in the Gulf of Oman, an area leading into the strait from the east, resulting in a mariner’s death, Oman said.
Iran has threatened vessels approaching Hormuz and is believed to have launched multiple attacks.
Global shippers pull back
In response, major carriers have suspended operations in the area. Maersk, the world’s largest shipping company, halted all vessel crossings through the Strait of Hormuz until further notice. Other carriers, including Hapag-Lloyd, CMA CGM, and MSC, issued similar advisories.
Industry experts emphasize the immediate effects: fewer ships moving through the strait, higher insurance costs, and a growing backlog of vessels waiting to pass. Analysts from Kpler estimate about 70 laden oil tankers and 75 clean tankers (refined products) in the Middle East Gulf ready to transit, roughly double the usual level, with another roughly 60 tankers waiting just outside the Gulf east of Hormuz.
A February preview
Iran briefly shut down portions of Hormuz in mid-February for military drill purposes, triggering a roughly 6% rise in oil prices in the days that followed.
Historically, Iran has sometimes harassed shipping through the narrows, and during the 1980s Iran-Iraq war both sides attacked ships and mined routes, effectively interrupting traffic at times. Yet repeated threats to close the strait have not persisted since the 1980s, even amid last year’s broader 12-day conflict when Israel and the U.S. targeted Iran’s nuclear and military infrastructure.
Anderson reported from New York.
