
If And When Iran Closes The Strait Of Hormuz
This is potentially a very dangerous moment. The Strait of Hormuz is an important shipping lane through which 20% of the world's oil transits – about 20 million barrels each day.
The waterway connects the Persian Gulf and the Gulf of Oman. Iran can either disrupt maritime traffic or attempt to“close” the strait altogether. These are distinctly different approaches with different risks and outcomes.
The first option is to try and disrupt maritime traffic like Yemen's Houthi rebels have been doing in the Red Sea since winter 2024. This can be done by attacking passing ships with rockets and drones.
There are already reports that Iran has started to jam GPS signals in the strait, which has the potential to severely interfere with passing ships, according to US-based maritime analyst Windward .
Disruption of this kind is likely to deter shipping companies from using this route for fear of casualties and loss of cargo. Shipping companies that want to avoid the Red Sea can always use alternative shipping lanes, such as the Cape of Good Hope route. As inconvenient as that is, there is no such option in the case of the Gulf.
As we've seen with Houthis' attacks, such disruptions have impacts on oil price, but also ripple effects on stock markets and inflation. Although the US and its western allies can absorb these economic effects – certainly for a while – disrupting the strait would still demonstrate that Tehran has some leverage.

Legal Disclaimer:
MENAFN provides the
information “as is” without warranty of any kind. We do not accept
any responsibility or liability for the accuracy, content, images,
videos, licenses, completeness, legality, or reliability of the information
contained in this article. If you have any complaints or copyright
issues related to this article, kindly contact the provider above.
Most popular stories
Market Research

- Everstake Brings Ethereum Experts Together To Explore Post-Pectra And Institutional Adoption
- Bitget Adds AINUSDT To Futures Trading With Bot Integration
- Nominis Wins 'Product Innovation Award' At Mastercard Fintech Finals In Berlin
- BSGM Engages CXG To Acquire FINRA/SEC-Registered Broker-Dealer To Expand Publicly Traded RWA Tokenization Operations
- First Trust Financials Alphadex Becomes The Largest Shareholders Of Freedom Holding After Timur Turlov
- Primexbt Rolls Out Major Platform Upgrades And Enhanced Trading Conditions
Comments
No comment