Eurasia Press & News
In the aftermath of the coordinated United States (US)-Israel airstrikes on Iran’s nuclear facilities, the Islamic Parliament of Iran passed a resolution recommending a blockade of the Strait of Hormuz—a 32-kilometre-wide passageway between Iran and Oman that opens in the Arabian Sea. Although the final decision rests with Iran’s Supreme National Security Council, the resolution underscores the geoeconomic reverberations of a military conflict rooted in entrenched geopolitical rivalries.
Unfettered access to the Strait of Hormuz is vital to global energy security. Close to 25 percent of daily global oil production (21 million barrels per day or bpd) and 20 percent of global seaborne liquified petroleum gas (LPG) trade (11.5 billion cubic feet per day) pass through this maritime chokepoint. Over 80 percent of this energy supply is destined for major Asian economies––China, India, South Korea, and Japan.
This is essentially the sixth instance in the past 15 years that Tehran has issued a threat to cordon off the Strait of Hormuz. Over the years, the frequency and seriousness of its threats have escalated in tandem with external pressure and conflict—especially in the context of its nuclear programme and oil export capacity. However, this 2025 parliamentary vote marks the first formal legislative ensorsement of such a move, suggesting a new threshold in Iran’s strategic calculus.
Hormuz’s vitality for Iran and the world
The Strait of Hormuz’s geostrategic location apropos of Iran grants Tehran disproportionate geoeconomic leverage. Unlike other trade routes such as the Red Sea and the Panama Canal, the Strait of Hormuz cannot be circumvented by ships to reach the desired destinations. However, a naval blockade or mining of the seaways by Iran would entail significant economic ramifications for the country itself. The resulting ripple effect would also engulf its Asian partners (Arab and Southern) and the global insurance and shipping industry.
While Iran may leverage this geostrategic fulcrum as part of its non-kinetic pressure tactics against the US, the decision will not be cost-free. In 2023, he energy sector (oil and gas) comprised 54.4 percent of Iranian exports, estimated at US$ 53 billion. 77 percent of Iran’s oil exports were destined for China (at heavily discounted rates), totalling 1 million bpd and generating approximately US$ 40 billion in government revenue for Tehran. Iran would be able to alienate Beijing—its largest trade and the sole energy trade partner—if it blockades the Strait of Hormuz. This would also impact critical Iranian imports such as refined petroleum products, medicines and pharmaceuticals, and agricultural goods.
A potential blockade will also have repercussions for Tehran’s bilateral ties with Gulf states, which bear hefty economic stakes in keeping Hormuz open. The United Arab Emirates (UAE), Qatar, and Saudi Arabia export approximately 3 million bpd, 1.5 million bpd, and 5.5 million bpd of oil, respectively, relying instrumentally on the Strait of Hormuz. While Saudi Arabia’s East-West pipeline and the UAE’s Abu Dhabi Crude Oil Pipeline serve as bypass infrastructure apropos of Hormuz, they will not be able to offset the holistic supply chain shocks due to undercapacity issues. Qatar stands to suffer the most acute disruption, as it lacks bypass infrastructure and channels all its energy exports through the Ras Laffan Industrial City on the Persian Gulf.
The recent decision taken by Iran to launch a contained, and perhaps even an orchestrated military attack against a US military base in Qatar has shattered any illusory sense in the Gulf that it can sit out a broader Israel–Iran conflict. This situation extends beyond the question of oil because cities—such as Doha, Abu Dhabi, Dubai, and Riyadh—are pitching themselves as global financial centres backed on being safe havens in a region otherwise known for volatility and turmoil.
The closure of the Strait of Hormuz will also impact the energy security of key economic partners such as India and China among other Asian economies. For instance, India, China, Japan, and South Korea import2.8 million bpd, 4.5 million bpd, 1.8 million bpd and 1.7 million bpd, respectively, through the Hormuz. Consequently, a closure would impact over 10 million bpd of crude and most Gulf-origin LNG bound for Asia, severely disrupting energy flows to key economies and driving up global prices up to US$ 150 per barrel of oil, as per some estimates. For India, a blockade of the Strait of Hormuz could also trigger domestic social and economic disturbances/upheavels, considering Indian seafarers constitute nearly 10 percent of the global merchant navy workforce.
Iran’s Hormuz blockade could also result in surging shipping costs and war-risk and political-risk insurance premiums, raising the cost of doing business in the global energy sector. In the aftermath of 2019’s short-lived ‘tankers war’ in Hormuz, war-risk premiums increased from 0.1 to 0.5 percent, translating to over US$ 0.5 million in added cost per voyage for a Very Large Crude Carrier (VLCC). Insurance firms can also classify the Gulf as ‘high-risk’ , increasing underwriting costs by 300–500 percent. In 2019, VLCC charter rates jumped from US$ 30,000 per day to over US$ 150,000 per day. A similar or worse trend is likely amid a blockade.
Conclusion
In 2025, despite the scale and severity of the now-dubbed 12-day war between Israel and Iran, blocking the waterways of Hormuz is an unlikely reality. For Tehran, maintaining diplomatic consistency with states it has functioning relations with—especially in the Global South and Asia—-stands at odds with its measures such as disrupting energy security or orchestrating maritime blockades, which risk escalating global oil prices.. In that aspect, this 12-day war had a non-conventional impact, as oil prices tumbled, quite contrary to the pre-war anticipations, when Israel and Iran exchanged fire. Nonetheless, several Asian importers have experienced their share of issues with Tehran. Both New Delhi and Seoul have had their ships seized by Iran in 2021 on frivolous charges such as environmental damage when sailing through the Persian Gulf. These were seen as pressure tactics by entities such as the Islamic Revolutionary Guard Corps (IRGC) over frozen payments worth billions in Asian countries due to sanctions.
Global chokepoints do not operate in isolation. If the Strait of Hormuz faces blockades today, its impact will reverberate across global trade, including via other similar geopolitical and geoeconomic bottlenecks such as the Malacca Strait, the Suez Canal, and beyond. As narratives of continuity of interests across theatressuch as Europe, the Middle East, and the Indo-Pacific are promoted, siloed approaches to security of trade, and more specifically energy, do not stand. Energy remains a foundational pillar of both geopolitics and geoeconomics, influencing actors across the spectrum—from major powers to microstates.
