The strategic Strait of Hormuz is once again at the centre of global concern following unprecedented U.S. airstrikes on Iranian nuclear sites on June 21–22, 2025. With Iran's parliament voting to close the waterway—pending approval from its Supreme National Security Council—fears are mounting over a potential shutdown of the corridor through which 20% of the world's crude oil and 21% of its LNG pass.
Historically, despite repeated geopolitical flare-ups—such as the Iran-Iraq "Tanker War" in the 1980s and tensions in 2011–12 and 2018–19—the strait has remained open. Analysts note that Iran's threats to close Hormuz have often been rhetorical, serving as strategic leverage during moments of heightened conflict or sanctions. But this time, following direct U.S. strikes and Iran's retaliatory posture, closure risks appear more imminent than ever.
Closing the Strait would deeply damage Iran's own economy, which depends on Hormuz for most of its oil and gas exports, primarily to China and India. A closure would also trigger widespread global repercussions. Oil prices are already rising; Brent crude futures jumped 18% in June, reaching a five-month high of US$79.04. A full closure could push prices past US$100 per barrel, with LNG spot rates likely spiking to US$25–30/MMBtu. Such price surges would hit Asia hardest, especially China, India, Japan, and South Korea, forcing nations to tap into strategic reserves and scramble for alternative sources.
Major energy exporters like Saudi Arabia and the UAE may bypass Hormuz via alternate pipelines, but Qatar and others have fewer options. Disruption would also severely impact maritime container transport. Jebel Ali, a key port in the UAE that handled 15.5 million TEUs in 2024, depends on access through Hormuz. A closure would shift traffic to Asian transshipment hubs, increase congestion, and trigger surcharges across global shipping routes due to higher fuel and insurance costs.
Already, insurers have raised premiums by over 60% for ships navigating the strait, and fears of a broader regional conflict are growing. Analysts warn the conflict may spread to the Red Sea, where Yemen's Houthi rebels could resume attacks on container ships. Iranian support for the Houthis has turned the Bab el-Mandeb Strait into a high-risk zone since late 2023, and Israeli naval strikes on rebel-held ports in Al Hodeidah further raise the stakes.
Despite the risk, global shipping giants Maersk and Hapag-Lloyd confirmed their vessels continue to transit Hormuz under heightened security measures. Both are monitoring the evolving situation closely and are prepared to divert ships if conditions deteriorate further.
As tensions escalate, the global supply chain faces growing uncertainty. Whether or not a full closure materialises, the current crisis has already redrawn risk perceptions around one of the world's most vital maritime corridors.
Source 1: Drewry
Source 2: Blueberries Consulting
Source 3: Marine Insight