Strait of Hormuz Explained: The Key to Global Energy Security

Strait of Hormuz which is the world's most critical oil chokepoint may be choked as tension between US, Israel and Iran escalate following devastating airstrikes on Iranian nuclear facilities.

Now, all the eyes are on this narrow 21-mile waterway which is also a lifeline of global energy markets as the stretch between Iran and Oman connects the oil-rich Persian Gulf to the Gulf of Oman and Arabian Sea, carrying roughly £12.8 billion ($17.1 billion) worth of crude oil daily.

Sunday's vote in Iran's parliament to authorise closure of the Strait of Hormuz, after US bombing has sent shockwaves through markets with Brent crude futures soaring over 9% to levels not seen since late 2022.

The motion, whilst symbolic, places the final decision with Iran's Supreme National Security Council.

Grasp the Strait's Strategic Weight

The Strait of Hormuz is the world's most critical oil chokepoint, with 20 million barrels of crude, about one-fifth of global daily consumption, flowing through daily, according to the US Energy Information Administration.

Iran controls the northern side, giving it significant leverage. For Asian economies, particularly China, the Strait is indispensable.

China, the largest buyer of Iranian oil, imported 5.4 million barrels daily through the Strait in early 2025, while India and South Korea relied on 2.1 million and 1.7 million barrels, respectively.

In contrast, the US and Europe import far less, at 400,000 and 500,000 barrels daily. A closure would devastate Asian markets, where 84% of the Strait's crude and 83% of its liquefied natural gas head, spiking energy prices globally.

X posts highlight rising alarm, with users noting oil prices could hit £80 ($107) per barrel if Iran acts on threats to block the Strait.

Navigate Iran's Threats and Global Risks

Amidst Iranian Majlis (parliament) vote to close the strait, the Revolutionary Guards Commander Ismail Kowsari also announced that the decision affects the narrow waterway.

PBS reports Brent crude surged above 3.1% per barrel after US airstrikes on 22 June 2025, with analysts warning of £80 ($107) oil if disruptions occur.

Historically, Iran has never fully closed the Strait, even during the Iran-Iraq War, as such move could face global backlash, as BBC notes, given the Strait's role in stabilising energy markets.

Mitigate the Economic Fallout

A Strait closure would be catastrophic, particularly for oil-dependent Asia. Rob Thummel of Tortoise Capital told CNN a disruption could push oil prices toward £80 ($107) per barrel, reigniting global inflation.

India's Petroleum Minister, Hardeep Singh Puri, reassured investors on 22 June 2025 that diversified supply routes and weeks of reserves could cushion short-term shocks. However, prolonged closure would strain even prepared economies.

The US and Europe, less reliant on the Strait, would still face price hikes, with US oil futures already up 4.3% to £59.87 ($80.39) on 17 June 2025.

Markets remain jittery but calm, betting on containment, as Reuters suggests, though a single attack on oil infrastructure could change that overnight.

A Fragile Artery—Handle with Care

The Strait of Hormuz is the world's energy highway, and its stability hangs by a thread.

Protecting this chokepoint is non-negotiable for global energy security as the arithmetic is stark: 84% of the crude oil and condensate and 83% of the liquefied natural gas that moved through the Strait of Hormuz went to Asian markets in 2024.

China, India, Japan, and South Korea would bear the brunt, accounting for 69% of all Hormuz crude flows.

Alternative routes offer limited relief. Saudi Arabia's East-West Pipeline can handle 7 million barrels daily, whilst the UAE's Abu Dhabi-Fujairah pipeline manages 1.6 million barrels.

The Strait's vulnerability demands vigilance, as even a partial disruption could send oil prices soaring and economies reeling.

Originally published on IBTimes UK