Why the Strait of Hormuz matters so much in the Iran war

Why the Strait of Hormuz Matters in the Iran Conflict

The Critical Ceasefire Agreement

A temporary truce between Iran and the United States to end fighting depends on the guarantee of unimpeded movement through the Strait of Hormuz. This waterway, a key conduit for global energy trade, was effectively closed by Iran following attacks by the U.S. and Israel on 28 February. The strait’s strategic role became apparent as tensions rose, sending fuel prices to a peak. However, the announcement of the ceasefire triggered a sharp decline, with oil prices falling by approximately 15%.

A Vital Maritime Passage

The Strait of Hormuz links the Persian Gulf to the Arabian Sea, flanked by Iran to the north and Oman, alongside the UAE, to the south. Its width varies, but the narrowest section is only 33 kilometers wide. This passage is essential for the world’s largest oil tankers, enabling trade between Middle Eastern producers and global consumers. In 2025, around 20 million barrels of oil and refined products traversed the strait daily, according to the U.S. Energy Information Administration (EIA). This volume represents nearly $600 billion in annual energy commerce.

Global Economic Ripple Effects

Energy exports from Iran, Iraq, Kuwait, Qatar, Saudi Arabia, and the UAE pass through the strait, which also carries 20% of the world’s liquefied natural gas (LNG). Qatar alone shipped about 9.3 billion cubic feet of LNG daily in 2024, while the UAE contributed 0.7 Bcf/d. LNG, a compressed form of gas, reduces volume by 600 times for transport before being reconverted at destination. The strait also facilitates fertiliser exports from the Middle East, with one-third of global trade moving through it. Additionally, it serves as a lifeline for imports like food, medicine, and technology.

Threats and Vulnerabilities

During hostilities, Iran’s threats to target ships and tankers disrupted traffic, causing a drop in monthly vessel counts from 3,000 to a fraction of that. The strait lies entirely within the territorial waters of Iran and Oman at its narrowest point, making it a prime area for attacks by drones, missiles, and possibly mines. Non-profit United Against Nuclear Iran reported that at least 24 commercial ships were struck, with three near misses, as of 2 April.

Strategic Military Actions

The U.S. has opted for air strikes rather than deploying warships to the strait. On 18 March, military strikes targeted Iranian anti-ship missile installations. While Trump once urged allies and China to secure the strait with naval forces, his call received limited support. The U.S. later asserted its ability to maintain control without external assistance. In the 1980s, during the Iran-Iraq war, the strait became the site of a “tanker war,” where both nations attacked neutral vessels to disrupt oil flows. Kuwaiti tankers transporting Iraqi oil were particularly at risk.

“You can be attacked, and you can’t get insurance or it is extremely expensive,” said Arne Lohmann Rasmussen, a Global Risk Management analyst, during the crisis.

Regional Impact and Adaptation

The disruption in Hormuz has profoundly affected Asia, where China alone accounts for nearly 90% of Iran’s oil exports. Governments in the region implemented measures such as remote work mandates, reduced working weeks, and early university closures to manage fuel shortages. In Africa, South Sudan and Mauritius introduced electricity rationing. Europe saw Slovenia become the first EU country to enforce fuel rationing. These actions underscore the strait’s global economic importance and the cascading effects of its closure.