The Hormuz Strait is an important trade route. Iran has previously threatened to close the Hormuz Strait. This move will affect trade and impact global oil prices. However, Iran has never implemented this measure.
The Hormuz Strait is one of the strategic bottlenecks of the world oil market, which has important geopolitical significance for the United States and other countries in the context of the world economy's strength greatly dependent on oil flows.
The Hormuz Strait is located between Oman and Iran, connecting the Persian Gulf region in the north with the Gulf of Oman in the south and further away the Arabian Sea.
About a fifth of the world's oil consumption is transported through the Hormuz Strait. According to statistics fromvortexa, from the beginning of 2022 to the end of May 2025, nearly 17.8 million to 20.8 million barrels of crude oil, concentrated gas and fuel will pass through the Hormuz Strait area every day.
Members of the Organization of the Petroleum Exporting Countries (OPEC) export almost all of the group's oil through the Hormuz Strait to Asia.
The closure of the Hormuz Strait is expected to have a direct impact on the US, causing oil prices to immediately spike, leading to inflation in the US and globally.
However, Iran also suffered direct economic losses due to the ban. Iranian oil is also exported via the route, and the closure of the Hormuz Strait risks dragging the Gulf countries into the ongoing conflict.
The closure of the Hormuz Strait will be especially disadvantageous for China and other Asian economies that depend on crude oil and gas transported via the route. An estimated 84% of crude oil and 83% of liquefied natural gas moved through the Hormuz Strait last year to Asian markets.
China, Iran's largest oil consumer, imported 5.4 million barrels per day through the Hormuz Strait in the first quarter of this year, while India and South Korea imported 2.1 million and 1.7 million barrels per day, respectively. Meanwhile, the US and Europe only imported 400,000 and 500,000 barrels per day, respectively, in the same period.
US Secretary of State Marco Rubio has called on China to participate in preventing Iran from closing the Hormuz Strait. He also warned that if the Strait of Hormuz is closed, Iran will make another serious mistake, which is an economic suicide.
Iran's parliament has approved a proposal to close the Hormuz Strait, but the final decision will depend on senior Iranian leaders.
