Close the Strait of Hormuz, says Khamenei’s aide after US attacks Iran. What is this key oil shipping route?

The Israel-Iran war took a dramatic turn with Donald Trump deciding that the US should enter the conflict. American B-2 bombers and the possibility of a 30,000-pound “bunker buster” bomb were used to strike key Iranian nuclear facilities, including Fordow, early Sunday (June 22). The spotlight is now on Iran and how it would respond.

Iran’s Foreign Minister Seyed Abbas Araghchi condemned the US strikes as “outrageous”, saying Iran is reserving “all options to defend its sovereignty”. “The events this morning are outrageous and will have everlasting consequences. Each and every member of the UN must be alarmed over this extremely dangerous, lawless and criminal behaviour,” he wrote in a post on X.

A prominent adviser to Iran’s Supreme Leader Ali Hosseini Khamenei has called for missile strikes on US Navy ships and the closure of the Strait of Hormuz, a crucial oil shipping route. “Following America’s attack on the Fordow nuclear installation, it is now our turn,” warned Hossein Shariatmadari, the editor-in-chief of the hardline Kayhan newspaper, a well-known conservative voice who has previously identified himself as Khamenei’s “representative”, reports CNN.

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While Khamenei has not responded to the US strikes, shutting the Strait of Hormuz is one of the many options, experts say, Iran could consider.

This isn’t the first time that Iran has threatened to close the Strait of Hormuz for traffic in retaliation, which, in turn, could restrict trade and impact global oil prices.

What is the Strait of Hormuz?

The Strait of Hormuz is a narrow yet critical waterway situated between Iran and Oman. It connects the Persian Gulf, north of it, with the Gulf of Oman to the south, and extends onward to the Arabian Sea. The Strait of Hormuz is almost 161 kilometres long and 33 km wide at its narrowest point, with the shipping lane just three km wide in either direction.

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The strait is deep enough for the world’s biggest crude oil tankers, and is used by the major oil and gas producers in West Asia — and their customers. At any given time, there are several dozen tankers on their way to the Strait of Hormuz, or leaving it.

As per UN law, countries can exercise control up to 12 nautical miles (13.8 miles) from their coastline, which means that at its narrowest point, the strait and its shipping lanes lie entirely within Iran and Oman’s territorial waters.

Why is the Strait of Hormuz important?

The small and simple answer to this question is oil. The Strait of Hormuz sees roughly 20 million barrels per day of oil and oil products shipments. In fact, the US Energy Information Administration (EIA) stated that the oil flow through the Strait of Hormuz averaged 21 million barrels per day in 2022, roughly 21 per cent of the global crude trade.

Furthermore, Opec members Saudi Arabia, Iran, the United Arab Emirates, Kuwait and Iraq export most of their crude via the strait, mainly to Asia.

Additionally, one-third of the world’s liquified natural gas LNG passes through the route.

It is because of this that the strait is significant, with many even calling it the oil artery of the world. Experts note that any disruption, even a minor one, could significantly drive up global energy prices, inflate shipping costs, and cause substantial supply delays.

In fact, energy experts speaking to Reuters have said that any blockade or significant disruption could push oil prices “far above $100 a barrel”.

Can Iran shut down the Strait of Hormuz?

While Iran by law controls the Strait of Hormuz at its narrowest, international convention states Iran is not allowed to act at the expense of the right of passage for foreign ships. But that doesn’t mean that Iran hasn’t used the Strait of Hormuz as a leverage in disputes with other nations or to register its dissatisfaction with sanctions against it.

As Anas Alhajji, managing partner at Energy Outlook Advisors, told CNBC, “Let’s be real about the Strait of Hormuz. First of all, most of it is in Oman, not in Iran. Number two, it’s wide enough that the Iranians cannot close it.”

But that hasn’t stopped Iran from causing disruptions by harassing ships in the Strait of Hormuz. For instance, in May 2022, Iran seized two Greek tankers and held them for six months as a response to confiscation by Greek and US authorities of an Iranian vessel.

Last April, hours before launching a drone and missile attack on Israel, Iran’s Islamic Revolutionary Guard Corps seized an Israel-linked container ship near the Strait of Hormuz. At the time, Tehran claimed that the ship had violated maritime rules, but experts said that Israel’s links to the ship were the reason for its capture.

So, will Iran block the Strait of Hormuz this time?

It seems that Iran is resorting to old tactics of threatening to close the Strait of Hormuz rather than actually doing so. There are a number of reasons why analysts believe that Tehran won’t actually go ahead with such a move.

Why?

Firstly, Israel is the one country in the region that would face no direct consequences from a blockade of the Strait of Hormuz. According to Arab News, all of the Jewish nation’s estimated consumption of 220,000 barrels of crude a day comes via the Mediterranean, from countries including Azerbaijan (exported via the Baku–Tbilisi–Ceyhan pipeline, which runs through Turkey to the eastern Mediterranean), the US, Brazil, Gabon and Nigeria.

This means that Israel would not be affected by the move, with many analysts even pointing to the fact that it would harm Iran’s own economy, given that it relies on the waterway for its oil exports.

Secondly, the closure of the Strait of Hormuz would result in Iran inviting China’s ire. Beijing is Iran’s largest trading partner and Iran’s largest oil customer. As Ellen Wald, President of Transversal Consulting, told CNBC, “China does not want the flow of oil out of the Persian Gulf to be disrupted in any way, and China does not want the price of oil to rise. So they’re going to bring the full weight of their economic power to bear on Iran.”

Former US Pentagon official Michael Rubin says the move to shut the Strait would be “suicidal” for Iran. “Forty-four per cent of the fuel that goes through Hormuz ends up in Asia — mostly in China, and to some degree in India“So there might be a short disruption. But beyond that, Iran would be committing suicide,” he said.

Rubin emphasised that Iran’s dependence on fuel imports — including gasoline — means that closing Hormuz would strangle its economy before hurting its adversaries. “Their military and economy would wither away,” he said, making it clear that the threat may be more political theatre than military reality.

Now, with the escalating conflict, some do note that there’s a faint possibility that Iran may resort to undertaking this extreme move. Amena Bakr, head of Middle East and Opec+ insights at Kpler, was quoted as saying, “[Closing the strait] is kind of an extreme scenario, although we are in an extreme situation. So that’s why I’m not putting that option completely off the table. We need to consider it.”

With inputs from agencies