Nightmare scenario: How Iran, hit by US & Israel strikes, may choke world's oil supply via Strait of Hormuz
Iran's strategic position along the Hormuz coastline provides various retaliatory possibilities against US strikes. (AI image)
Will Iran choke the global oil supply by closing the Strait of Hormuz? Recent US military actions against Iran's nuclear sites have highlighted Tehran's potential to disrupt oil commerce, particularly via the strategically vital Strait of Hormuz.
Experts consider a complete blockade of Hormuz lasting beyond several days highly unlikely. Such an action would severely restrict oil movement and could drive prices up by nearly 70%, according to JPMorgan & Co. analysts, triggering worldwide inflationary pressures and economic slowdown.
Whilst Iran has repeatedly issued warnings about closing the Strait of Hormuz, through which 20% of global oil passes daily, it also has various measured options to target adversaries whilst safeguarding relationships with allies, particularly China, its primary oil customer.
Iran might refrain from disrupting oil transportation, considering historical instances where such threats did not materialise. Tehran must consider several factors: potential counterstrikes on its energy facilities, possible Chinese disapproval of flow disruptions, and risks to its own oil shipments, which are vital for Chinese supply.
Additionally, the ongoing conflict with Israel and the US might have reduced Iran's capability to target oil tankers and regional oil infrastructure effectively.
Furthermore, Western nations would likely respond decisively to protect maritime passage through this crucial waterway if threatened.
Using Strait of Hormuz for Retaliation
Iran's strategic position along the Hormuz coastline provides various retaliatory possibilities against US strikes. These range from minor disruptions to maritime traffic to severe actions, including potential drone strikes, mine placement, or explosive attacks on tankers that could render the strait unusable for commercial vessels, according to a Bloomberg report.
"If Iran were to decide to begin to take action in the Straits of Hormuz, there's a wide range of things that can look like," Daniel Sternoff, non-resident fellow at the Columbia University's Center on Global Energy Policy, said on the center's podcast before the US attack happened. "We can kind of draw a huge set of scenarios and unknowns which have all sorts of consequences."
Also Read |
'Highest in two years': India increases oil imports from Russia, US amidst Iran-Israel war; why it's about strategic positioning, not panic
Iran could readily escalate its interference with merchant vessels passing through the Strait of Hormuz.
Previously, Iranian authorities have compelled ships to enter their waters and detained vessels, causing significant distress amongst crew members, the report said.
The Combined Maritime Forces, a naval alliance based in Bahrain, has noted that Iranian small boats have been approaching commercial vessels regularly. The organisation cautions that current diplomatic tensions heighten the risks associated with these encounters.
Should Iran adopt more aggressive tactics, merchant vessels might need to travel in groups under Western naval protection. Whilst this would significantly reduce shipping efficiency, oil supplies should remain stable, provided sufficient tanker capacity exists.
Since June 13, GPS signal interference has significantly affected maritime operations, impacting approximately 1,000 vessels daily.
The navigation difficulties caused by this disruption contributed to a collision involving oil tankers on Tuesday.
Despite one tanker's owner dismissing any connection to regional tensions, the incident's occurrence shortly after Israel's military actions raised questions.
The deployment of sea mines could substantially affect maritime traffic through the strait, though this strategy might prove counterproductive as it would also endanger Iranian vessels.
Daily monitoring by Bloomberg shows 110-120 vessels exceeding 10,000 deadweight tons traversing Hormuz, with operations continuing normally through Friday.
Houthi Way
Iran might adopt similar strategies to those employed by Houthi forces who have conducted attacks on commercial vessels in the Red Sea amidst the Israel-Gaza conflict.
The Houthi deployment of ballistic missiles, alongside sea and air drones against commercial vessels, has compelled shipping companies to navigate around Africa rather than traverse the Suez Canal. This has resulted in commercial vessel movement declining approximately 70% compared to 2022-2023 figures.
Although the militants claimed to focus on vessels connected to the US, UK or Israel, these associations were often indirect, yet the attacks effectively discouraged maritime traffic across all categories. Vessels traversing the Strait of Hormuz lack alternative routes, creating a distinct risk assessment scenario. Nevertheless, should Iran target sufficient vessels, the impact on supply chains could prove substantial.
Also Read |
Iran-Israel war & US bombings: Should possible Strait of Hormuz closure worry India about its oil supply? Explained in 10 points
Choking Oil Supply: Regional Impact
Iran's capability to affect oil supply extends beyond the Strait of Hormuz.
The Iraqi Basra oil installations are situated near the Iranian frontier. In 2019, Iran faced accusations from Saudi Arabia regarding an assault on Abqaiq's oil processing facilities, which disrupted approximately 7% of global oil production.
Experts indicate that whilst retaliatory actions targeting oil infrastructure cannot be dismissed, such escalation would prove detrimental to all parties involved.
Satellite observations show increased crude exports from Iran's principal export facility at Kharg Island, where storage has reached capacity.
Should this facility become a target, Iran would suffer significant revenue losses, potentially prompting reciprocal strikes.
Such circumstances would primarily benefit speculative oil traders and non-regional producers. Iran's improved diplomatic ties with neighbouring states could deteriorate if it pursues aggressive actions.
Severe possibility: Complete Blockade of Strait of Hormuz
The most severe possibility involves a sustained, complete closure of Hormuz. The region exports approximately 20 million barrels daily of crude oil and refined products, with no alternative maritime routes available.
OPEC+ nations Saudi Arabia and UAE possess surplus capacity but face significant constraints in finding alternative routes to Hormuz for their oil exports.
Also Read |
Iran-Israel conflict: India keeping tab on Chabahar Port, International North-South Transport Corridor; why it's important
Navin Kumar from Drewry maritime consultancy said according to Bloomberg: "We don't believe the Strait of Hormuz is going to close under any scenario.
Maybe for a day or two, but it's unlikely there will be any closure for a week or more. It's highly unlikely."
Iran's historical threats to disrupt transit have remained unfulfilled, and questions persist about their military capabilities to execute such actions. US Vice-President JD Vance cautioned that this would prove economically detrimental for Iran.
Amrita Sen of Energy Aspects Ltd remarked: "You are looking at pretty much the biggest disruption to trade flows we've had in decades — prices would sky-rocket."
Whilst oil prices would certainly rise, the length of any disruption would be crucial.
Global consuming nations maintain substantial reserves, with approximately 5.8 billion barrels of crude and fuel in storage, according to Bloomberg's industry data, excluding non-OECD nations' refined fuel reserves. Annual petroleum flow through Hormuz amounts to 7.3 billion barrels, providing adequate protection even in extreme circumstances.
Stay informed with the latest
business
news, updates on
bank holidays
and
public holidays
.
AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
23 minutes ago
- Time of India
China Sides With Iran, Greenlights Hormuz BLOCKADE? Beijing's First Response As U.S. Seeks Help
/ Jun 23, 2025, 06:00PM IST United States' airstrike on the Iranian nuclear sites has triggered a massive global oil crisis scare. Tehran's parliament has decided to close the Strait of Hormuz, a critical global oil chokepoint. The strait accounts for 1/5th of the movement of oil containers across the world. According to reports, United States had urged China not to led the Ayatollah Khamenei-led regime to shut the strait. Will China heed to Trump's request after a bitter trade tariff war between the two superpowers?
Time of India
25 minutes ago
- Time of India
Did the US really wipe out Iran's nuclear sites? Reports say Trump may have been tricked by Tehran
Despite President Trump's declaration of a complete victory, the US airstrikes on Iran's nuclear facilities have yielded mixed results. While some sites sustained damage, particularly at Fordow, doubts remain about the extent of destruction to underground facilities. Concerns linger regarding Iran's potential relocation of enriched uranium, potentially hindering but not halting their nuclear ambitions. Tired of too many ads? Remove Ads Did the US really wipe out Iran's nuclear sites? Tired of too many ads? Remove Ads What do satellite images reveal about the damage? What do experts think about the attack? Has Iran secretly moved its highly enriched Uranium? Tired of too many ads? Remove Ads How does this impact Iran's nuclear ambitions? FAQs US President Donald Trump announced with confidence that US airstrikes had destroyed Iran's main nuclear sites and called it a complete victory. However, expert opinions and satellite images present a different Saturday night, Donald Trump dispatched seven B-2 stealth bombers from the United States to destroy Tehran's nuclear program by dropping massive bunker-busting bombs on three enrichment facilities in Fordow, Natanz, and underground facilities may have survived, and enriched uranium may have been moved without anyone knowing. The attack may have slowed down Iran's nuclear plans, but it did not stop them, as per reports by CNN and of the Joint Chiefs Gen. Dan Caine said Sunday that a US submarine used Tomahawk cruise missiles to strike an Isfahan location where a US official estimates that approximately 60% of Iran's stockpile of already-enriched nuclear material is kept Isfahan facility was not hit by massive "bunker-buster" bombs dropped by B-2 bombers, in contrast to the other two Iranian facilities targeted in the operation, as per a report by the US used 12 bunker busters to destroy Iran's facility at Fordow, another underground location that contained centrifuges needed to enrich uranium, the facility's evident survival has prompted doubts about whether Trump's declared objective was even to commercial satellite imagery, the U.S. attack on Iran's Fordow nuclear plant seriously damaged, if not completely destroyed, the deeply buried site and the uranium-enriching centrifuges it contained, but experts said on Sunday that there was no proof of it. However, it is unknown how much damage has been done because the facility has layers of Technologies' satellite imagery from Thursday and Friday revealed "unusual activity" at Fordow, including a lengthy line of cars waiting outside one of the facility's Lewis, a weapons expert and professor at the Middlebury Institute of International Studies, has closely examined commercial satellite images of the strike sites and said the damage to the facility seems limited to aboveground structures.'They just punched through with these MOPs,' said David Albright, the head of the Institute for Science and International Security and a former U.N. nuclear inspector, in reference to the Massive Ordnance Penetrator bunker-busting bombs that the United States claimed it Eveleth, a satellite images specialist and associate researcher with the CNA Corporation, pointed out that it was impossible to confirm the destruction below ground. The hall that houses hundreds of centrifuges is "too deeply buried for us to evaluate the level of damage based on satellite imagery," he stated to Iran, prior to US attacks on its nuclear bases, the majority of its highly enriched uranium was smuggled to a hidden location. Iran claimed that it had moved its 400 kg stockpile, much of which was kept at Isfahan, and satellite photos showed convoys departing all three locations in recent days, as per a report by think that the majority of Fordow's 400 kg of 60%-enriched uranium was transferred prior to Operation Midnight Hammer, as per a report by The of 16 trucks snaking down a road near the entrance of the Fordow plant, obscured by rubble and dirt, was released by US defense contractor Maxar Technologies on June defense company TS2 Space reports that trucks, bulldozers, and security convoys swarm Fordow, where analysts observed a "frantic effort" to move shielding materials or intelligence analyst Ronen Solomon stated that transferring Iran's uranium would be "like having fuel without a car" and that they are unable to do much with it unless they develop a small-scale project that we are unaware of, as per The also warned that Iran might be concealing this and other nuclear components in places that Israel, the United States, and the U.N. nuclear inspectors are unaware would take years and rely on Tehran's capacity to restore essential equipment before Iran could produce a nuclear weapon, even though it might have the entirely; experts believe some deep underground facilities and uranium stockpiles were has the potential to rebuild, as key equipment and uranium may have been secretly relocated.
Time of India
25 minutes ago
- Time of India
Strait of Hormuz blockade looms: Asian countries most vulnerable to Iran's trump card
Around 84 percent of oil passing through the Strait of Hormuz is destined for Asia, leaving the economies of China, India, South Korea and others vulnerable should Iran blockade the crucial trading route over US strikes on its nuclear sites. Around 14.2 million barrels of crude oil and 5.9 million barrels of other petroleum products pass through the strait per day -- representing around 20 percent of global production in the first quarter, according to the US Energy Information Administration (EIA). And crude oil from Saudi Arabia, the UAE, Iraq, Kuwait, Qatar and Iran almost exclusively passes through the corridor. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Your IQ Is 140 If You Can Answer 10 Of These Questions Correctly IQ International Undo Here are the main Asian countries where oil exported via the strait is destined: China More than half of the oil imported by East Asia passes through the Strait of Hormuz, experts estimate. Live Events China is one of the largest buyers, importing 5.4 million barrels of crude oil a day through Hormuz in the first quarter this year, according to the EIA. Saudi Arabia is China's second-largest supplier of crude oil, accounting for 15 percent of its total oil imports -- 1.6 million barrels a day. China also buys more than 90 percent of Iran's oil exports, according to the analysis firm Kpler. It imported 1.3 million barrels of Iranian crude oil a day in April, down from a five-month high in March. India India is highly dependent on the Strait of Hormuz, importing 2.1 million barrels of crude a day through the corridor in the first quarter, EIA data shows. Around 53 percent of India's imported oil in early 2025 came from Middle Eastern suppliers, particularly Iraq and Saudi Arabia, local media reported. Also Read: India safe from Strait of Hormuz closure due to diversified oil imports, says Hardeep Singh Puri Wary of an escalating conflict in the Middle East, New Delhi has increased its imports of Russian oil over the past three years. "We have been closely monitoring the evolving geopolitical situation in the Middle East since the past two weeks," India's Minister of Petroleum and Natural Gas Hardeep Singh Puri said on Sunday. "We have diversified our supplies in the past few years and a large volume of our supplies do not come through the Strait of Hormuz now," he wrote on X, adding "We will take all necessary steps to ensure stability of supplies of fuel to our citizens." South Korea Around 68 percent of South Korea's crude oil imports pass through the Strait of Hormuz -- 1.7 million barrels a day this year, according to the EIA. South Korea is particularly dependent on its main supplier Saudi Arabia, which last year accounted for a third of its oil imports. Seoul's trade and energy ministry said there have been "no disruptions so far in South Korea's crude oil and LNG imports" but "given the possibility of a supply crisis", officials were "planning for potential disruptions in the Strait of Hormuz". "The government and industry stakeholders have prepared for emergencies by maintaining a strategic petroleum reserve equivalent to about 200 days of supply," the ministry said in a statement. Japan Japan imports 1.6 million barrels of crude oil a day through the Strait of Hormuz, the EIA says. Japanese customs data showed 95 percent of crude oil imports last year came from the Middle East. The country's energy freight companies are readying for a potential blockade of the strait. "We're currently taking measures to shorten as much as possible the time spent by our vessels in the Gulf," shipping giant Mitsui OSK told AFP. Others Around 2 million barrels of crude oil passing through the Strait of Hormuz each day in the first quarter were destined for other parts of Asia -- particularly Thailand and the Philippines -- as well as Europe (0.5 million barrels) and the United States (0.4 million barrels). Limited alternatives Asian countries could diversify their oil suppliers, but it is difficult to replace the large volumes coming from the Middle East. In the short term, "elevated global oil inventories, OPEC+'s available spare capacity, and US shale production all could provide some buffer", experts at MUFG Bank said. "However, a full closure of the Hormuz Strait would still impact on the accessibility of a major part of this spare production capacity concentrated in the Persian Gulf," they said. Saudi Arabia and the UAE have infrastructure to bypass the strait, potentially mitigating disruptions, but their transit capacity remains very limited -- around 2.6 million barrels a day. And the Goreh-Jask pipeline built by Iran to export via the Gulf of Oman, which has been inactive since last year, has a maximum capacity of only 300,000 barrels per day, according to the EIA.
