Strait of Hormuz: one of the world’s top 5 vital oil transit chokepoints
Iran’s Parliament has decided to move forward with a plan to close the Strait of Hormuz — a strategic maritime corridor through which 20% of the world’s daily oil trade flows, amounting to over US$1 billion per day. The final decision now awaits approval from Iran’s Supreme National Security Council, according to state-run Press TV.
The move is widely seen as a strategic response to the recent U.S. airstrikes on Iranian nuclear sites. Maj Gen Emal Kosari, a senior commander in Iran’s Islamic Revolutionary Guard Corps (IRGC), warned that “Iran will act whenever necessary.” Analysts believe the rising tensions could send global oil prices sharply higher.
What is the Strait of Hormuz?
The Strait of Hormuz is a narrow sea passage connecting the Persian Gulf to the Gulf of Oman. It lies between southern Iran to the north and the eastern coasts of the UAE and Oman to the south. Over 17 million barrels of oil pass through the strait daily, making it the world’s most critical energy chokepoint.
At its narrowest point, the strait measures just 33 kilometres wide, with only two designated shipping lanes — one in each direction, both under 3 kilometres wide. This makes the passage highly vulnerable to disruption through naval mines, shore-launched missiles, and interceptions by patrol boats or helicopters.
The Strait is the only maritime outlet to the Indian Ocean for Persian Gulf nations. Any closure would directly affect oil shipments from Iran, Saudi Arabia, Kuwait, Iraq, Bahrain, Qatar, and the UAE, posing a grave threat to global energy supplies.
The importance of the Strait of Hormuz
The Strait of Hormuz is one of the most vital chokepoints for global oil and gas transport. On average, around 15 tankers pass through it each day, carrying between 16.5 and 17 million barrels of crude oil — representing 20–21% of global daily crude trade.
The strait is also a key transit route for liquefied natural gas (LNG), accounting for roughly one-quarter of the world’s daily LNG shipments.
Energy security and geopolitical risks
Energy flows through the Strait of Hormuz are crucial to global energy security, particularly for nations that depend heavily on oil and gas imports from the Middle East. Given Iran’s strategic location and influence in the region, the strait remains a flashpoint for geopolitical tensions.
Potential consequences of a closure
Rapid surge in oil and gas prices.
Any disruption to shipping through the strait could severely cut global oil and gas supplies, potentially pushing prices above US$100 per barrel — or even to US$200, which would raise production costs and increase the global cost of living.
Global economic slowdown
A sharp rise in energy prices would impact manufacturing, transport, and household spending, increasing the risk of a global economic downturn or even a recession.
Supply chain complications
Shipping delays and increased freight costs would affect global supply chains, not only for energy but also for other goods that pass through the region.
Food security
While the Strait primarily handles energy shipments, higher fuel costs would drive up food production and transportation expenses, exacerbating food inflation and raising food security concerns.
Impacts on Thailand
Thailand imports approximately 50% of its crude oil and natural gas from the Middle East. Should the Strait of Hormuz be closed, the resulting surge in energy prices would severely affect the Thai economy, increasing living costs for households and operational costs for businesses alike.
