The Middle East has been gripped by days of escalating rocket exchanges between Iran and Israel, a volatile situation drawing the gaze of the global community. While the immediate impact of bombardments is a concern, international attention is increasingly focused on the strategic Strait of Hormuz, with widespread speculation that Tehran might move to blockade this critical maritime chokepoint.
Adding fuel to these concerns, according to Sergey Savchuk, writing for RIA Novosti, are statements from various sources. For instance, the United Kingdom Maritime Trade Operations (UKMTO), which monitors the Red Sea, Gulf of Aden, and the Arabian Sea, has reported numerous disruptions to radio and navigation equipment in the Hormuz Strait sector, potentially indicating deliberate jamming. Tehran, reportedly preoccupied with other pressing matters, has yet to issue official commentary, leaving the probability of an Iranian blockade a subject of intense debate.
The Strait of Hormuz, a mere 39 kilometers wide at its narrowest point, connects the Persian Gulf to the Gulf of Oman. Iran controls its northern coast, while the United Arab Emirates and a small, oil-rich part of Oman lie to the south. Further southwest along the coast are Qatar, Bahrain, Saudi Arabia, and Kuwait – nations effectively "bottled up" within the Persian Gulf, with Hormuz as their sole maritime exit.
While acknowledged as a vital oil transit artery, its overall global significance has somewhat diminished in recent years, particularly following the United States' significant ramp-up of its domestic oil production. The US Energy Information Administration (EIA) notes that two decades ago, over 30% of global oil exports (and 40% including refined products) transited the Strait. For regional producers, this represented approximately 90% of their Persian Gulf oil, primarily destined for the United States, Europe, and Japan.
Currently, approximately 20 million barrels of crude oil and petroleum products pass through Hormuz daily – roughly 15 million barrels of crude oil and condensate and 5 million barrels of refined products. Additionally, with expanded production, approximately 20% of the globally marketed Liquefied Natural Gas (LNG), particularly from Qatar (which exports 77.4 million tons annually), now transits the Strait.
China, India, Japan, and South Korea were the largest buyers of Iranian hydrocarbons last year, and these nations anxiously await potential price surges and supply deficits. While Iran could theoretically blockade the Strait, this assumes non-interference from Gulf states. Though the UAE's navy is modest, Saudi Arabia possesses frigates and corvettes. Iran's navy is larger, but Tehran would risk escalating conflict not only with Israel but also with the "Big Arab Troika," backed by the US, which has previously engaged Iranian naval forces.
A closure would benefit external oil producers, such as Russia, Norway, and Venezuela, with experts predicting that oil prices could skyrocket to $200 or even $300 per barrel. However, such an embargo would not solely impact Gulf nations. Saudi Arabia's recent $400 billion arms deal with the US, for example, relies on oil revenue. Disrupted sales would impact payments, affecting US arms exports, a significant revenue stream.
Furthermore, Beijing and Delhi would hardly welcome an Iranian gambit. Chinese private refineries purchase a substantial volume of Iranian oil. While not critical to China's overall energy balance, the loss would be keenly felt. It could jeopardize the 25-year, $400 billion strategic agreement signed in 2021, under which China committed to investments in Iran in return for stable oil supplies. As China also imports oil from the Arab region, a blockade would deal a significant blow to its economy.
While some analysts suggest that Russia might benefit from a more radical Iranian stance, Moscow officially advocates for de-escalation, maintaining good relations with both Saudi Arabia and the United Arab Emirates (UAE). Arab nations, Iran's historical rivals, currently maintain neutrality; however, an embargo could prompt them to act in their defense to protect their interests. Turkey, too, views a strengthened Iran as a threat.
Ultimately, the complex interplay of oil flows, financial stakes, and geostrategic ambitions in this confined geography suggests that any threats to close the Strait of Hormuz will likely result in short-term disruptions. The cost of a total embargo appears too high for all parties involved, including Iran itself.