Iran’s conflict in the region has raised serious concerns about the security of the Strait of Hormuz, the world’s busiest oil shipping route. According to UK Maritime Trade Operations, three commercial ships were hit by/ unknown projectiles on 11 March near the coasts of the United Arab Emirates and Oman, causing damage and forcing one vessel to be evacuated after a fire. Meanwhile, the United States military reported destroying 16 Iranian mine-laying ships in the strait.
Nearly 20% of the world’s oil supply normally passes through this waterway, and the ongoing tensions have already reduced sea traffic and pushed global oil prices higher. If the strait were fully blocked, it could significantly disrupt global trade and heavily impact major oil-importing economies such as China, India, and Japan
What is the Strait of Hormuz - and where is it?
The Strait of Hormuz is one of the world's most important shipping routes, and its most vital oil transit choke point.
Bounded to the north by Iran and to the south by Oman and the United Arab Emirates (UAE), the corridor – which is only about 50km (31 miles) wide at its entrance and exit, and about 33km wide at its narrowest point – connects the Gulf with the Arabian Sea.The strait is deep enough for the world's biggest crude oil tankers, and is used by the major oil and gas producers in the Middle East – and their customers.
In 2025, about 20 million barrels of oil passed through the Strait of Hormuz per day, according to estimates from the US Energy Information Administration (EIA) – that's nearly $600bn (£447bn) worth of energy trade per year.
That oil comes not only from Iran, but also other Gulf states such as Iraq, Kuwait, Qatar, Saudi Arabia and the UAE.
What would be the impact of closing the strait?
Closing or threatening the Strait of Hormuz would have major global economic effects because around 3,000 ships pass through it every month carrying oil and gas. Even without a full blockade, drone and missile threats have already discouraged tankers from using the route, making insurance extremely expensive and disrupting shipments.
As a result, global oil prices briefly rose above $100 per barrel before dropping closer to $90, still higher than before the conflict. Shipping costs have also surged; according to London Stock Exchange Group, the price of hiring a supertanker to transport oil from the Middle East to China has nearly doubled to over $400,000.
The disruption also affects Gulf economies such as Saudi Arabia, which depend heavily on energy exports. Meanwhile, Iran exports about 1.7 million barrels of oil per day, earning roughly $67 billion in oil revenue in the financial year ending March 2025, according to estimates from the International Energy Agency and the Central Bank of Iran.
Asia would be hit the hardest. In 2022, about 82% of the oil leaving the strait went to Asian countries, and China alone buys around 90% of Iran’s exported oil. Higher oil prices could therefore increase manufacturing and transport costs, eventually leading to higher prices for consumers worldwide.
Can alternative routes offset the blockade?
Oil-exporting countries in the Gulf have developed alternative routes to reduce dependence on the Strait of Hormuz. For example, Saudi Arabia operates a 1,200 km pipeline capable of transporting up to 5 million barrels of crude oil per day, according to the U.S. Energy Information Administration. In some cases, it has also temporarily converted a natural gas pipeline to carry crude oil.
Similarly, the United Arab Emirates has built a pipeline linking its inland oilfields to the port of Port of Fujairah on the Gulf of Oman, with a daily capacity of at least 1.5 million barrels.
Although these alternative routes can help bypass the Strait of Hormuz, they cannot fully replace it. According to Reuters, diverting oil through these systems could still lead to a global supply drop of about 8–10 million barrels per day.