What Will Happen If the Strait of Hormuz Closes?
Since the media reports of Iran's plan to close the Strait of Hormuz have been circulating on social media, the world has been in panic because the strait is the gateway to almost a fifth of the world's daily oil output.
Around 84 percent of the oil leaving the Strait of Hormuz is set for Asia, with 14.2 million barrels of crude oil and 5.9 million barrels of other petroleum products leaving the strait every day, which is 20 percent of global production in the first quarter, according to the US Energy Information Administration (EIA).
The crude oil from Saudi Arabia, the UAE, Iraq, Kuwait, Qatar and Iran is exported exclusively from this strait.
China is one of the biggest importers of oil passing through the strait because it imports 5.4 million barrels of crude oil per day in the first quarter, according to EIA.
Saudi Arabia is China's second-largest supplier by exporting 1.6 million barrels a day. China also imports 90 percent of Iran's oil exports, according to Kpler.
India imported 2.1 million barrels of crude a day through the corridor in the first quarter. According to local media, almost 53 percent of India's imported oil came from Iraq and Saudi Arabia in the first quarter of 2025.
South Korea imported 1.7 million barrels a day this year from the strait, which is almost 68 percent of its crude oil imports. The country is mainly dependent on Saudi Arabia for its imports, which accounted for a third of its oil imports last year.
Japan receives 1.6 million barrels of crude oil per day through the Strait of Hormuz, according to the EIA. Last year, 95 percent of the country's crude oil imports were from the Middle East.
Around 2 million barrels of crude oil exported through Hormuz is for the rest of the world including the following:
Thailand
Phillippines
Europe (0.5 million barrels)
United States (0.4 million barrels)
Analysts and experts are worried about the possibility of the full closure of the Strait of Hormuz because it would disrupt global oil supplies and lead to a huge spike in oil prices.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Arabian Business
39 minutes ago
- Arabian Business
Saudi Arabia signs $586m port privatisation deals to boost logistics sector
Saudi Arabia has signed SR2.2bn ($586m) worth of Build-Operate-Transfer (BOT) privatisation contracts for multi-purpose cargo terminals at eight major ports. The deals were signed by the Saudi Ports Authority (Mawani) in cooperation with the National Centre for Privatisation, and witnessed by Saleh Al Jasser, Minister of Transport and Logistic Services and Chairman of Mawani. The contracts span a 20-year period and were awarded to Saudi Global Ports (SGP) and Red Sea Gateway Terminal, two of the Kingdom's leading logistics firms. Saudi port privatisation deals Eastern coast: King Abdulaziz Port (Dammam), Jubail Commercial Port, King Fahd Industrial Port (Jubail), Ras Al-Khair Port Western coast: Jeddah Islamic Port, Yanbu Commercial Port, King Fahd Industrial Port (Yanbu), Jazan Port Strategic goals and impact: Modernize cargo handling infrastructure using state-of-the-art cranes, stackers, and trucks Reduce truck turnaround times and vessel berth times Increase container capacity and operational efficiency Attract further private investment into Saudi Arabia's logistics ecosystem Strengthen the Kingdom's position as a global logistics hub Minister Al Jasser underscored that the transport and logistic ecosystem will continue boosting partnerships with the private sector across all regions and sectors in the Kingdom. He noted that the new privatisation contracts are an extension of strategic partnerships established by Mawani with major national and international specialised companies to empower the maritime transport sector, support economic diversification, and reinforce the Kingdom's position as a global logistics hub.
Al Etihad
4 hours ago
- Al Etihad
US stocks rally as crude prices fall sharply
24 June 2025 00:51 New York (AFP)Wall Street stocks rose as markets shrugged off Iran's response to the weekend US military strike while petroleum-related equities plummeted with crude announced it had launched missiles at a major US base in Qatar. But Qatar described the situation as stable, while energy analysts said oilfield assets were not affected. The Dow Jones Industrial Average finished up 0.9 percent at 42, broad-based S&P 500 rose 1.0 percent to 6,025.17, while the tech-rich Nasdaq Composite Index jumped 0.9 percent to 19, individual companies, Tesla surged 8.2 percent after the company's robotaxi service made its debut in Austin, Texas this weekend. Northern Trust surged 8.0 percent following a Wall Street Journal report that said it had been approached by Bank of New York Mellon about a merger. Bank of New York Mellon dropped 2.2 percent. Israel-Iran Conflict Continue full coverage
The National
5 hours ago
- The National
Oil prices fall sharply after Iran gives US notice of attack on base in Qatar
Oil prices fell sharply on Monday after Iran attacked a US base in Qatar in retaliation for strikes on three of its nuclear sites at the weekend, in a more restrained response than previously feared. Brent, the global benchmark for crude, fell 8.30 per cent to $70.62 a barrel as of 12.15am UAE time. West Texas Intermediate, the gauge for US crude, fell 8.34 per cent to $67.68 a barrel. 'We've seen a lot of risk. We've seen increase in tensions but we haven't actually seen any supply disrupted,' said Rachel Ziemba, founder of geopolitical risk firm Ziemba Insights. Iran launched a missile strike on Al Udeid Airbase after the US struck three nuclear sites, including Fordow, at the weekend. US President Donald Trump said no casualties were reported, adding that Tehran had given Washington advanced notice of the attack. We've seen a lot of risk. We've seen increase in tensions, but we haven't actually seen any supply disrupted Rachel Ziemba, founder of Ziemba Insights "Iran clearly telegraphed the strike on Qatar and did not want to escalate tensions through strikes on oil and gas targets," said Matthew Bey, senior global analyst at the Rane Network. The UAE joined Qatar and its neighbours in condemning the attack on Qatari territory, with Jasem Al Budaiwi, Secretary General of the Gulf Co-operation Council, calling it a 'direct threat' to member states' security. Iran, the third-largest crude producer in the Opec alliance, had vowed to defend itself after the strikes. Oil prices had jumped to a five-month high earlier in the day over fears that the US strikes on Iran would affect global energy supplies. 'Markets were sort of in this mode of pricing in more risk and worried about an extreme where there'd be meaningful frictions getting oil and gas to markets,' Ms Ziemba said. 'Markets are viewing this Iranian response to the US bombings and the telegraphed, face-saving measure and believing that it reduces risks.' In a social media post, Mr Trump said: "Hopefully, be no further hate" and that Iranian officials had "gotten it all out of their 'system'". While Mr Bey said Mr Trump's recent social media posts suggest an off-ramp for current tension, "none of the underlying issues appear resolved". Mr Trump had claimed that the US strikes had 'totally destroyed' Iran's nuclear sites at Fordow, Natanz and Isfahan. US Chairman of the Joint Chiefs of Staff Gen Dan Caine told reporters on Sunday the three sites suffered 'severe damage and destruction', but said a final assessment will take time. Meanwhile, Mr Trump warned energy producers to 'keep oil prices down', although it was not clear to whom he was directing his message. He also told the Department of Energy in a social media post to 'drill, baby, drill', a refrain the President has used as part of his broader efforts to boost domestic oil production. US markets also edged higher after Iran's retaliatory strike. The Dow Jones Industrial Average closed up 0.89 per cent, or 374.96 points. The S&P 500 rose 0.96 per cent while the tech-heavy Nasdaq Composite climbed 0.94 per cent. 'I don't think many of us were expecting this. I think it's still highly speculative because we just don't know what the next step will be from Iran. It could be a diplomatic step or it could be escalation,' said Peter Andersen, founder of Andersen Capital Management. Escalating tension in the Middle East has also added another layer of uncertainty facing the Federal Reserve as the US central bank awaits tariff-related inflation. After holding interest rates between 4.25 and 4.50 per cent last week, Fed chairman Jerome Powell told reporters there could be a surge in energy prices but he did not expect a lasting impact on inflation. While Mr Powell provided no timeline on when the Fed could cut rates again, two Fed governors broke ranks by saying the central bank could be on course to reduce policy again in July. "Should inflation pressures remain contained, I would support lowering the policy rate as soon as our next meeting,' Fed Governor Michelle Bowman said during a conference in the Czech Republic. Her remarks echoed that of fellow Fed Governor Christopher Waller, who maintained his view last week that tariff-related inflation will be a one-time effect. In a note published after Israel's strike on Iran on June 11, JPMorgan analysts estimated oil could average between $120 and $130 a barrel if the conflict escalates through the closure of the Strait of Hormuz, driving up shipping costs. 'I don't think the Fed can make any kind of rational decision right now,' said Mr Andersen. 'Why would the Fed cut rates in the face of $100 a barrel oil? I think they're well ahead of scenario planning."
