The Strait of Hormuz is the most important energy chokepoint on Earth: roughly 20 million barrels of oil — about a fifth of global consumption — pass through it every day, along with around a fifth of the world's liquefied natural gas. Every Iran crisis becomes a global crisis because of this waterway.
The Geography
The strait connects the Persian Gulf to the Gulf of Oman and the open ocean. At its narrowest it is only about 21 miles (34 km) wide, with the shipping channels — two lanes, one inbound and one outbound, each roughly two miles wide — running largely through Omani territorial waters, within easy reach of the Iranian coast, its islands, missile batteries and fast-boat bases.
What Flows Through It
- Crude oil and condensate: exports of Saudi Arabia, Iraq, the UAE, Kuwait, Qatar, Iran and Bahrain — most with no alternative sea route
- LNG: Qatar, one of the world's largest LNG exporters, ships essentially all of it through Hormuz — there is no pipeline alternative for gas
- Destination: the large majority heads to Asia — China, India, Japan and South Korea are the biggest customers
The Limited Workarounds
Saudi Arabia's East–West pipeline to the Red Sea and the UAE's pipeline to Fujairah (bypassing the strait) can together carry only a few million barrels per day — a fraction of Hormuz volumes. For Qatari gas, Kuwaiti crude or Iraqi Gulf exports, there is no bypass at all.
Iran's Leverage — and Its Paradox
Iran's ability to threaten Hormuz — with mines, anti-ship missiles, drones, and IRGC fast-attack craft — is its single greatest strategic card against economies that depend on Gulf energy. Iranian officials invoke closure in every major crisis, and during the June 2025 war Iran's parliament voted to authorise it.
But the card is hardest to play precisely because it is so powerful. Iran's own oil exports — its economic lifeline, flowing overwhelmingly to China — go through the same strait. Closure would strangle Iran's revenue, infuriate Beijing (its one great-power partner), devastate neighbours whose neutrality Iran needs, and hand the US Navy an unambiguous justification for a campaign against Iran's entire naval and coastal infrastructure.
Why Markets Price It Anyway
Even a low-probability closure carries such catastrophic consequences that oil markets attach a "Hormuz premium" to every escalation. During the twelve-day war, tanker freight and insurance rates spiked, some shipowners paused transits, and GPS interference disrupted navigation — the price mechanics are analysed here. The strait has never been fully closed in modern history. Understanding how close it came — and what closure would actually do — is the subject of the companion article.
This article is part of a 20-part analysis series on the Iran–USA conflict covering the complete history, the June 2025 war, the Strait of Hormuz, oil markets, global inflation and future scenarios. Facts reflect the situation as of early 2026.
