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Iran Closing the Strait of Hormuz: Impacts on Oil and Trade


Large oil tanker ship smoking sails Strait of Hormuz, Persian Gulf, Iran
Image Credit: Getty Images

In a significant escalation of tensions, Iran has boldly moved to assert its position against the West by voting to potentially close the Strait of Hormuz. This decision follows a series of U.S. airstrikes targeting vital nuclear and military facilities within Iran, specifically in key locations such as Natanz, Isfahan, and Tehran. Conducted in collaboration with Israeli intelligence, these June 2025 strikes are regarded as some of the most aggressive U.S. actions in the region in recent years. In response to these attacks, Iran’s foreign minister declared that the Islamic Republic is prepared to exercise all options available to defend its sovereignty and national interests.

For further details on this developing situation, continue reading below.

Understanding the Geopolitical Significance of the Strait of Hormuz

The Strait of Hormuz serves as a crucial maritime passage connecting the Persian Gulf to the Gulf of Oman. This narrow waterway is indispensable for global trade, as approximately 20% of the world’s oil supply traverses it daily. The strait is flanked by Iran to the north and the United Arab Emirates and Oman to the south, making it not only a critical economic route but also a focal point for geopolitical tensions. Control over this strait is vital for energy security and has far-reaching implications for international relations and trade.

Current Status of the Strait of Hormuz: Is It Closed?

As of now, the Strait of Hormuz remains open. On June 22, 2025, Iranian lawmakers passed a resolution proposing the closure of this pivotal waterway in retaliation for the recent U.S. airstrikes on Iranian nuclear sites. However, this resolution is not yet enforceable and awaits final approval from Iran’s Supreme National Security Council or the Supreme Leader, Ayatollah Khamenei. The situation remains fluid, and any definitive action could lead to major geopolitical repercussions.

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Historical Context: Has Iran Ever Closed the Strait of Hormuz?

While Iran has never officially closed the Strait of Hormuz, it has frequently issued threats to do so, particularly during times of heightened tensions with the United States or allied nations. These threats serve as a strategic maneuver in Iran’s broader foreign policy, aimed at leveraging its control over this critical maritime passage to gain political leverage and assert its dominance in the region.

The Global Impact of a Closed Strait of Hormuz

Should the Strait of Hormuz be closed, the ramifications for global energy markets and shipping routes would be profound and immediate. Given that roughly 20% of the world’s oil supply—including exports from major producers like Saudi Arabia, Iraq, the UAE, and Kuwait—passes through this narrow channel daily, such a closure would disrupt the flow of oil and could lead to skyrocketing prices. This disruption would likely trigger fuel shortages or drastic cost increases in nations that heavily depend on oil exports from the Gulf.

U.S. Secretary of State Marco Rubio highlighted the international implications of this potential crisis during an appearance on Fox News’ Sunday Morning Futures with Maria Bartiromo. He urged the Chinese government to address the situation, given China’s significant dependency on the Strait of Hormuz for its oil supply. This emphasizes how interconnected global economies are and how disruptions in one region can create ripple effects worldwide.

Rubio further cautioned that closing the strait would constitute “economic suicide” for Iran, as the Islamic Republic depends on this strategic passage to export its own oil. As the third-largest oil producer within OPEC, Iran produces approximately 3.3 million barrels per day and exports around 1.6 million bpd. Notably, nearly 80% of these exports are directed toward China, according to the U.S. Energy Information Administration (EIA).

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Echoing Rubio’s sentiments, Vice President J.D. Vance reiterated the potential fallout in an interview with NBC’s Meet the Press, warning that Iran’s economy is heavily reliant on the Strait of Hormuz. If Iran were to choose to close this vital passage, it would be making a decision that could lead to significant self-inflicted economic harm and substantial disruptions in global markets.

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Sarah Parker is a research analyst and content contributor with a strong interest in business strategy, organizational behavior, and social development. With a background in sociology and public policy, she focuses on exploring the intersection between research and real-world application. Sarah regularly contributes articles that bridge academic insights and practical relevance, aiming to foster critical thinking and innovation across sectors.