Why the Strait of Hormuz matters so much in the Iran war
Why the Strait of Hormuz Matters in the Iran Conflict
Iran and the United States reached an agreement to halt hostilities, contingent on ensuring “safe passage” through the critical waterway. This came after Tehran had temporarily disrupted the strait, a vital conduit for global oil and liquefied natural gas (LNG) shipments, following the US and Israel’s attack on February 28. The strategic chokepoint, which typically handles 20% of the world’s oil and LNG, saw fuel prices spike as tensions escalated. A 15% decline in oil prices followed the ceasefire announcement, signaling a brief reprieve.
Geography and Strategic Significance
Bordered by Iran to the north and Oman, along with the United Arab Emirates (UAE), the Strait of Hormuz is a narrow passage connecting the Gulf to the Arabian Sea. Its width ranges from 50 kilometers at the entrance to 33 kilometers at its most constricted point. The strait is deep enough to accommodate the largest crude oil tankers, making it essential for Middle Eastern oil and LNG producers and their international buyers.
Economic Impact of the Blockade
The waterway’s strategic role was underscored by its contribution to global energy trade. In 2025, an estimated 20 million barrels of oil and derivatives traversed the strait daily, valued at nearly $600bn annually. This includes oil from Iran, Iraq, Kuwait, Qatar, Saudi Arabia, and the UAE, as well as most of Qatar’s LNG exports. The UAE also sent 0.7 billion cubic feet per day through the strait. LNG, a gas converted into liquid form, occupies 600 times less space for transport, enabling its delivery to destinations where it is reconverted for use.
Military Actions and Security Measures
During the conflict, Iran’s military assets, including drones, missiles, and fast attack boats, posed a threat to vessels navigating the strait. At the narrowest point, the waterway lies within Iran and Oman’s territorial waters, extending 12 nautical miles from their coasts. The US has not stationed warships in the area, relying instead on air strikes against Iranian targets. On March 18, US forces targeted anti-ship missile sites near the strait, a tactic reminiscent of past conflicts.
“You can be attacked, and you can’t get insurance or it is extremely expensive,” said Arne Lohmann Rasmussen, a Global Risk Management analyst, during the period of instability.
Global Effects of the Fuel Crisis
Disruptions in the strait reverberated across the globe, affecting Asia significantly. China alone is estimated to purchase about 90% of Iran’s exported oil, highlighting the region’s reliance on the flow. Across Asia, daily life was impacted as governments implemented measures to conserve fuel, such as remote work mandates, shortened workweeks, and early university closures. In Africa, South Sudan and Mauritius restricted electricity usage, while Slovenia became the first EU country to enforce fuel rationing.
