Why the Strait of Hormuz matters so much in the Iran war
Why the Strait of Hormuz matters so much in the Iran war
The United States and Iran reached an agreement to pause hostilities, provided that unrestricted access to the Strait of Hormuz is secured. This waterway, a critical artery for global energy transport, had been effectively controlled by Iran since the attacks by the U.S. and Israel on February 28. Approximately 20% of the world’s oil and liquefied natural gas (LNG) traverse this strategic passage, and earlier tensions had driven up fuel prices significantly.
Following the ceasefire announcement, oil prices dropped by around 15%, offering relief to markets. The strait, spanning between Iran and Oman, is just 50 kilometers wide at its entry and exit points, with a narrowest section of 33 kilometers. Its depth accommodates the largest crude oil tankers, making it a vital link between the Persian Gulf and the Arabian Sea. Major oil and LNG producers in the Middle East, alongside their buyers, depend on this route for trade.
Global Trade Impact
Estimates from the U.S. Energy Information Administration (EIA) indicate that 20 million barrels of oil and petroleum products pass through the strait daily in 2025, valued at nearly $600 billion annually. This includes shipments from Iran, Iraq, Kuwait, Qatar, Saudi Arabia, and the UAE. Additionally, about one-third of the world’s fertiliser trade moves through the strait, with Qatar supplying most of the LNG, which is transported in liquid form for efficiency and later converted back to gas at its destination.
“You can be attacked, and you can’t get insurance or it is extremely expensive,” Arne Lohmann Rasmussen, chief analyst at Global Risk Management, told CBS News during the period of instability.
Challenges in the Waterway
The narrowest point of the strait lies entirely within the territorial waters of Iran and Oman, extending up to 12 nautical miles from their coasts. During hostilities, Iranian military assets such as drones, missiles, and fast attack boats posed a major threat to vessels navigating the region. By April 2, non-profit group United Against Nuclear Iran reported at least 24 commercial ships had been targeted, along with three near misses.
Asia has felt the consequences of the disruption, as China is estimated to absorb nearly 90% of Iran’s exported oil. This has forced governments to implement measures like remote work mandates, shortened workweeks, and early university closures to manage energy shortages. In Africa, South Sudan and Mauritius introduced electricity rationing, while Slovenia became the first EU nation to enforce fuel conservation protocols.
Military Actions and Historical Context
The U.S. has opted against deploying warships to the strait, focusing instead on aerial strikes against Iranian targets. On March 18, U.S. forces bombed anti-ship missile installations near the waterway. While President Trump had previously urged allies and China to secure the strait with naval support, his call received limited response. He later asserted that the U.S. could manage the situation independently.
In the late 1980s, the Iran-Iraq war saw a similar escalation, with strikes on oil infrastructure leading to a “tanker war.” Neutral ships were attacked to apply economic pressure, particularly targeting Kuwaiti tankers carrying Iraqi oil. This historical precedent highlights the strait’s role in shaping energy geopolitics and its potential to disrupt global supply chains.
