What is the Strait of Hormuz and what could happen to oil prices if Iran shuts it down?

Natalie Stechyson · CBC News

· Posted: Jun 23, 2025 4:34 PM EDT | Last Updated: 4 hours ago

It's called the world's astir captious lipid choke point — and Iran holds the power.

Washington's strikes connected Iran stoked fears that Iran could retaliate by closing the Strait of Hormuz, a waterway between Iran and Oman done which astir 20 per cent of the lipid and state consumed globally flows. 

Oil prices tumbled Monday aft Iran's archetypal retaliation didn't look to impact the strait, but analysts person warned that closing the strategic maritime entryway to the Persian Gulf could disrupt the travel of lipid and devastate the global economy, astatine slightest temporarily.

"It would beryllium highly dangerous," Kaja Kallas, the EU precocious typical for overseas affairs and information policy, told reporters Monday.

If Tehran decides to disrupt oregon unopen the strait, it would beryllium "perilous," said Burcu Ozcelik, a elder probe chap successful Middle East security at the Royal United Services Institute successful London, England.

"[It] could trigger planetary economical daze waves and runs antagonistic to Iran's ain interests," Ozcelik said successful an online statement.

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Where is the Strait of Hormuz?

The Strait of Hormuz runs betwixt Oman and Iran.

The strait connects the Persian Gulf with the Gulf of Oman and the Arabian Sea. It's lone 33 kilometres wide astatine its narrowest point, but heavy capable and wide capable to grip the world's largest crude lipid tankers. 

The shipping lane is conscionable 3 kilometres wide successful either direction.

How overmuch lipid passes done the strait?

About one-fifth of the world's full lipid depletion passes done the strait, according to the U.S. Energy Information Administration (EIA). Most of that lipid goes to Asia. In 2024, China, India, Japan, and South Korea were the apical destinations for crude lipid moving done the strait to Asia, notes the EIA.

"Large volumes of lipid travel done the strait, and precise fewer alternate options beryllium to determination lipid retired of the strait if it is closed," the EIA noted in an investigation past week.

Oil that passes done the strait comes from Saudi Arabia, the United Arab Emirates, Iraq, Iran, Kuwait and Bahrain, portion large supplies of liquefied earthy state travel from Qatar. 

Last year, 20.2 cardinal barrels of crude, condensate and fuels flowed done the strait daily, according to the EIA.

The EIA said that while most choke points tin beryllium circumvented by utilizing different routes, which add significantly to transit times, some, similar the Strait of Hormuz, person nary applicable alternatives.

"Most volumes that transit the strait person nary alternate means of exiting the region," the EIA wrote.

What could hap to lipid prices?

As the EIA explains, the inability of lipid to transit a large choke point, adjacent temporarily, "can make important proviso delays and rise shipping costs, perchance expanding satellite vigor prices."

Markets will beryllium connected borderline until determination is greater certainty arsenic to however Iran whitethorn respond, said Colby Connelly, a elder chap with the Washington, D.C.-based think-tank the Middle East Institute, successful an online statement.

On Sunday, Goldman Sachs analysts forecasted Brent crude lipid prices could deed $110 US a tube if the Strait of Hormuz is blocked. Other analysts person said prices could get arsenic high as $120-$130 per tube (at slightest temporarily).

"Given the strait's value successful planetary lipid trade, the interaction connected lipid would beryllium precise massive," Homayoun Falakshahi, elder lipid expert astatine planetary commercialized information company Kpler, said successful an online video statement. "For definite we'll beryllium seeing triple digits."

However, closing the strait would precise overmuch beryllium a past edifice for Iran, Falakshahi added.

Would Iran truly adjacent it?

Iran's parliament connected Sunday approved a measurement to adjacent the strait, Iran's Press TV reported, but immoderate specified determination would necessitate support from the Supreme National Security Council.

Iran has threatened to adjacent the strait successful the past but has ne'er done so. To bash so would chopped disconnected its ain lipid exports and harm its relations with trading spouse China and its oil-exporting Arab neighbours.

Suzanne Maloney, vice-president and manager of overseas argumentation astatine the Brookings Institute, called the ballot Sunday by Iran's parliament "purely symbolic."

"Such a measurement would further cripple its ain battered system and jeopardize its fragile but invaluable rapprochement with Saudi Arabia and the different Arab states on the Persian Gulf," Maloney said connected the Brookings website.

U.S. Secretary of State Marco Rubio on Sunday called on China to encourage Iran to not unopen down the Strait of Hormuz, citing China's reliance connected Iran's oil.

"It's economical termination for them if they bash it," Rubio said.

What other could Iran do?

Iran boasts a fleet of fast-attack boats and thousands of naval mines arsenic good arsenic missiles that it could usage to marque the strait impassable, astatine slightest for a time, according to The Associated Press.

Iran's main naval basal astatine Bandar Abbas is connected the northbound seashore of the strait. It could besides occurrence missiles from its agelong Persian Gulf shore, arsenic its allies, Yemen's Houthi rebels, person done successful the Red Sea.

Earlier connected Monday, shiptracking information showed several tankers turning distant from the strait, though immoderate turned backmost again, according to Reuters.

Connelly, with the Middle East Institute, noted that portion the U.S.'s strike adds much volatility to a concern that had already threatened lipid and state supplies, the strait "represents lone 1 imaginable choke constituent for a large vigor disruption."

"The Strait of Hormuz will, understandably, beryllium nether a microscope," Connelly said.

"But an progressively volatile concern could output unexpected disruptions astir captious export infrastructure successful the region, whether these would beryllium caused intentionally oregon otherwise."

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