The Iran-US war started when the joint attack was launched on Iran by the United States of America and Israel. It all began on feb 27th and has sparked a rapid outbreak of conflict that could expand across the Middle East.
Iran’s response has already included strikes on U.S bases in surrounding countries as far away as Qatar and Oman, and has announced the closure of the Middle East Strait of Hormuz. Going so far as threatening to set ships on fire if they enter the map of Middle East Strait of Hormuz.
The Strait of Hormuz is basically a small 55-kilometre-wide water strip between Iran and Oman, separating the Persian Gulf from the Arabian Sea. It is a particularly important piece of global real estate in terms of the energy sector and one of the busiest and most strategically significant shipping routes in the world.
Since a lot of oil has been exported in ships using the route of Hormuz, the closure of the map of Middle East Strait of Hormuz has disrupted oil and gas shipments from the region and shaken markets all around the world. Overall, marine traffic through the strait has dropped by 70 percent since the closure, with 18 loaded and 37 unloaded tankers remaining in the Persian Gulf.
About 13 million barrels of oil per day normally move through this narrow water strip, about 31 percent of global oil shipments. Blocking passage through the strait will certainly affect the world oil price.
Even a short-lived closure of parts of the strait in February 2025 led to a six percent jump in the oil price. Explore more market insights and geopolitical analysis on ForexDrift.
Closure of the Middle East Strait of Hormuz affects major ports belonging to Iraq, Kuwait, Saudi Arabia, and the United Arab Emirates, as well as Iran itself. For some of these countries, the Strait is the primary route through which oil reaches global markets.
On March 2nd, Brent Craude, the global standard, reached about $79 USD per barrel before declining a little, about eight percent higher than last week’s oil prices. West Texas intermediate and the North American standard reached $71 USD per barrel, which was a six percent increase.
Those price movements are already being felt all around the world. Gasoline prices in both the U.S. and Canada have begun to rise, although not as dramatically as commodity prices.
Increase cloud persistence as long as the war continues to disrupt tanker traffic through the Strait of Hormuz closed route.
Throughout the last 50 years, oil price increases have often indicated an upcoming economic downturn. Some events, such as the first and second oil crises in the 1970s and early 80’s, led to structural changes in global economies.
About 3,000 or so ships usually sail through the strait each month.
Analysts have warned that the longer there are threats to ships passing through the strait, the higher the price of oil – and the shipping of it – will be.
“It is de facto closed in that no one dares to go through,” Arne Lohmann Rasmussen, chief analyst at Global Risk Management, a provider of energy market insights, told CBS News.
“You can be attacked, and you can’t get insurance, or it is extremely expensive, so you have to wait until the security situation is better… If oil and gas coming from the Strait of Hormuz is cut off, that has significant ramifications for the market,” he added.
“While there is no physical blockade, threats from the Iranians, plus drone and missile attacks, mean tankers are not going through the strait.”
A spokesman for Iran’s foreign affairs ministry, Esmail Baghaei, told a news channel on Monday that oil tankers passing through the strait “must be very careful”.
Energy prices have soared since the start of the war, with huge swings, coming close to $120 on Monday before falling back. They remain well above levels before the conflict.
According to data from the London Stock Exchange Group, the cost of hiring a supertanker to ship oil from the Middle East to China has almost doubled from last week’s price to a record high of more than $400,000 (£298,300).
The almost complete closure of the vital shipping lane has also hurt Gulf countries, like Saudi Arabia, whose economies rely heavily on energy exports.
Iran, by comparison, exports about 1.7 million barrels per day, according to the International Energy Agency. Iran exported $67bn (£50bn) worth of oil in the financial year ending March 2025 – its highest oil revenue in the past decade – according to estimates by the Central Bank of Iran.
A blockade of the Strait Will Hit Asia Hard.
In 2022, around 82% of crude oil and condensates (low-density liquid hydrocarbons that typically occur with natural gas) leaving the Strait of Hormuz closed were bound for Asian countries, according to EIA estimates.
China alone is estimated to buy around 90% of the oil that Iran exports to the global market.
Because China uses that oil to make products it then exports to other countries, higher oil prices could also mean higher prices for consumers around the world.
As geopolitical tensions drive extreme volatility in oil and currency markets, traders look for reliable strategies. Explore ForexDrift’s professional trading services to navigate global market uncertainty with expert guidance.
United Nations rules allow countries to exercise control of territorial seas up to 12 nautical miles (13.8 miles) from their coastline.
At its narrowest point, the Strait of Hormuz and its shipping lanes lie entirely within Iran and Oman’s territorial waters.
It is unclear exactly how Iran plans to shut the strait, but according to experts, one of the most effective ways for them to do it would be to lay mines using fast attack boats and submarines.
The US military has said it “eliminated” 16 Iranian mine-laying ships in the strait.
Iran’s regular navy and the IRGC navy could also potentially launch attacks on foreign warships and commercial vessels.
However, large military ships may in turn become easy targets for US air strikes, and Trump has said that one of his aims is to destroy Iran’s navy.
Iran’s fast boats are often armed with anti-ship missiles, and the country also operates a range of surface vessels, semi-submersible craft, and submarines.
The US has previously used its military might to re-establish the flow of maritime traffic through the strait.
In the late 1980s, during the eight-year Iran-Iraq war, strikes on oil facilities escalated into a “tanker war” that saw both countries attacking neutral ships to exert economic pressure.
Kuwaiti tankers carrying Iraqi oil were especially vulnerable. Eventually, American warships began escorting them through the Gulf in what became one of the largest naval surface warfare operations since World War Two, according to the US Naval Institute.
The persistent threat of iran closes Strait of Hormuz has, over the years, prompted oil-exporting countries in the Gulf region to develop alternative export routes.
Saudi Arabia operates a 1,200km-long pipeline capable of transporting up to 5 million barrels of crude oil per day, according to the EIA.
In the past, it has also temporarily repurposed a natural gas pipeline to carry crude oil.
The United Arab Emirates has connected its inland oilfields to the port of Fujairah on the Gulf of Oman via a pipeline with a daily capacity of at least 1.5 million barrels.
Oil could be diverted along the alternate infrastructure to bypass the Strait of Hormuz, but Reuters reports that would lead to a drop in supply of between 8 and 10 million barrels per day.
However, all this, the war is still going on, and the state of Iran closing Strait of Hormuz is yet to be seen. On one side, Iran is taking a strong hold on restrictions affecting almost every other country; on the other hand, the U.S. and Israel are not backing off. The longer this war goes on, the more serious effects the world will face.
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This article is written by ForexDrift’s Market Research & Strategy Team, working closely with professional traders, risk analysts, and capital managers to evaluate copy trading and Forex investment models. Using real performance data, live market testing, and transparent risk frameworks, our experts provide practical insights that help investors choose strategies aligned with their financial goals and risk tolerance.
