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Strait of Hormuz: What happens if Iran shuts global oil corridor?

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Home Oil & Gas

Strait of Hormuz: What happens if Iran shuts global oil corridor?

By Gavin Butler,BBC News, Singapore ,BBC PersianandToby Mann

March 11, 2026
in Oil & Gas
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Three ships have been hit by “unknown projectiles” in the Strait of Hormuz, the world’s busiest oil shipping channel, the UK Maritime Trade Operations (UKMTO) has reported.

One commercial vessel was damaged off the coast of the United Arab Emirates, a second north of Oman was evacuated after a fire was ignited, and a third sustained damage in an unreported location on 11 March, the monitoring service said.

Meanwhile, the US military said it has “eliminated” 16 Iranian mine-laying ships in the strait.

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About 20% of the world’s oil usually passes through the strait and the war has severely reduced sea traffic and sent global oil prices soaring.

Iran previously said it would “set fire” to any ships trying to pass through the Strait, but a very small amount of traffic has continued.

Blocking the strait could further inflate the cost of goods and services worldwide, and hit some of the world’s biggest economies, including China, India and Japan, which are among the top importers of crude oil passing through the waterway.What is the Strait of Hormuz – and where is it?
The Strait of Hormuz is one of the world’s most important shipping routes, and its most vital oil transit choke point.

Bounded to the north by Iran and to the south by Oman and the United Arab Emirates (UAE), the corridor – which is only about 50km (31 miles) wide at its entrance and exit, and about 33km wide at its narrowest point – connects the Gulf with the Arabian Sea.The strait is deep enough for the world’s biggest crude oil tankers, and is used by the major oil and gas producers in the Middle East – and their customers.

In 2025, about 20 million barrels of oil passed through the Strait of Hormuz per day, according to estimates from the US Energy Information Administration (EIA) – that’s nearly $600bn (£447bn) worth of energy trade per year.

That oil comes not only from Iran, but also other Gulf states such as Iraq, Kuwait, Qatar, Saudi Arabia and the UAE.

What would be the impact of closing the strait?
About 3,000 or so ships usually sail through the strait each month.

Analysts have warned that the longer there are threats to ships passing through the strait, the higher the price of oil – and the shipping of it – will be.

“It is de facto closed in that no one dares to go through,” Arne Lohmann Rasmussen, chief analyst at Global Risk Management, a provider of energy market insights, told CBS News, the BBC’s US partner, last week.

“You can be attacked, and you can’t get insurance or it is extremely expensive, so you have to wait until the security situation is better… If oil and gas coming from the strait is cut off, that has significant ramifications for the market,” he added.

“While there is no physical blockade, threats from the Iranians, plus drone and missile attacks, mean tankers are not going through the strait.”

A spokesman for Iran’s foreign affairs ministry, Esmail Baghaei, told CNBC on Monday that oil tankers passing through the strait “must be very careful”.

Oil surged past $100 a barrel on Monday, before Trump said the war was “very far ahead of schedule” and “very complete, pretty much”. His comments led to a fall in the oil price, which is now closer to $90 a barrel, but is still well above pre-war levels.

According to data from the London Stock Exchange Group, the cost of hiring a supertanker to ship oil from the Middle East to China has almost doubled from last week’s price to a record high of more than $400,000 (£298,300).

The almost complete closure of the vital shipping lane has also hurt Gulf countries, like Saudi Arabia, whose economies rely heavily on energy exports.Iran, by comparison, exports about 1.7 million barrels per day, according to the International Energy Agency. Iran exported $67bn (£50bn) worth of oil in the financial year ending March 2025 – its highest oil revenue in the past decade – according to estimates by the Central Bank of Iran.

A blockade of the strait will also hit Asia hard.

In 2022, around 82% of crude oil and condensates (low-density liquid hydrocarbons that typically occur with natural gas) leaving the Strait of Hormuz were bound for Asian countries, according to EIA estimates.

China alone is estimated to buy around 90% of the oil that Iran exports to the global market.

Because China uses that oil to make products it then exports to other countries, higher oil prices could also mean higher prices for consumers around the world.
Three ships have been hit by “unknown projectiles” in the Strait of Hormuz, the world’s busiest oil shipping channel, the UK Maritime Trade Operations (UKMTO) has reported.

One commercial vessel was damaged off the coast of the United Arab Emirates, a second north of Oman was evacuated after a fire was ignited, and a third sustained damage in an unreported location on 11 March, the monitoring service said.

Meanwhile, the US military said it has “eliminated” 16 Iranian mine-laying ships in the strait.

About 20% of the world’s oil usually passes through the strait and the war has severely reduced sea traffic and sent global oil prices soaring.

Iran previously said it would “set fire” to any ships trying to pass through the Strait, but a very small amount of traffic has continued.

Blocking the strait could further inflate the cost of goods and services worldwide, and hit some of the world’s biggest economies, including China, India and Japan, which are among the top importers of crude oil passing through the waterway.

What is the Strait of Hormuz – and where is it?
The Strait of Hormuz is one of the world’s most important shipping routes, and its most vital oil transit choke point.

Bounded to the north by Iran and to the south by Oman and the United Arab Emirates (UAE), the corridor – which is only about 50km (31 miles) wide at its entrance and exit, and about 33km wide at its narrowest point – connects the Gulf with the Arabian Sea.

The strait is deep enough for the world’s biggest crude oil tankers, and is used by the major oil and gas producers in the Middle East – and their customers.

In 2025, about 20 million barrels of oil passed through the Strait of Hormuz per day, according to estimates from the US Energy Information Administration (EIA) – that’s nearly $600bn (£447bn) worth of energy trade per year.

That oil comes not only from Iran, but also other Gulf states such as Iraq, Kuwait, Qatar, Saudi Arabia and the UAE.

What would be the impact of closing the strait?
About 3,000 or so ships usually sail through the strait each month.

Analysts have warned that the longer there are threats to ships passing through the strait, the higher the price of oil – and the shipping of it – will be.

“It is de facto closed in that no one dares to go through,” Arne Lohmann Rasmussen, chief analyst at Global Risk Management, a provider of energy market insights, told CBS News, the BBC’s US partner, last week.

“You can be attacked, and you can’t get insurance or it is extremely expensive, so you have to wait until the security situation is better… If oil and gas coming from the strait is cut off, that has significant ramifications for the market,” he added.

“While there is no physical blockade, threats from the Iranians, plus drone and missile attacks, mean tankers are not going through the strait.”

A spokesman for Iran’s foreign affairs ministry, Esmail Baghaei, told CNBC on Monday that oil tankers passing through the strait “must be very careful”.

Oil surged past $100 a barrel on Monday, before Trump said the war was “very far ahead of schedule” and “very complete, pretty much”. His comments led to a fall in the oil price, which is now closer to $90 a barrel, but is still well above pre-war levels.

According to data from the London Stock Exchange Group, the cost of hiring a supertanker to ship oil from the Middle East to China has almost doubled from last week’s price to a record high of more than $400,000 (£298,300).

The almost complete closure of the vital shipping lane has also hurt Gulf countries, like Saudi Arabia, whose economies rely heavily on energy exports.

Iran, by comparison, exports about 1.7 million barrels per day, according to the International Energy Agency. Iran exported $67bn (£50bn) worth of oil in the financial year ending March 2025 – its highest oil revenue in the past decade – according to estimates by the Central Bank of Iran.

A blockade of the strait will also hit Asia hard.

In 2022, around 82% of crude oil and condensates (low-density liquid hydrocarbons that typically occur with natural gas) leaving the Strait of Hormuz were bound for Asian countries, according to EIA estimates.

China alone is estimated to buy around 90% of the oil that Iran exports to the global market.

Because China uses that oil to make products it then exports to other countries, higher oil prices could also mean higher prices for consumers around the world.

How can Iran close the strait?
United Nations rules allow countries to exercise control of territorial seas up to 12 nautical miles (13.8 miles) from their coastline.

At its narrowest point, the Strait of Hormuz and its shipping lanes lie entirely within Iran and Oman’s territorial waters.

It is unclear exactly how Iran plans to shut the strait but according to experts one of the most effective ways for them to do it would be to lay mines using fast attack boats and submarines.

Iran’s regular navy and the IRGC navy could potentially launch attacks on foreign warships and commercial vessels.

However, large military ships may in turn become easy targets for US air strikes, and Trump has said that one of his aims is to destroy Iran’s navy.

Iran’s fast boats are often armed with anti-ship missiles, and the country also operates a range of surface vessels, semi-submersible craft and submarines.Can alternative routes offset the blockade?
The persistent threat of a closure of the Strait of Hormuz has, over the years, prompted oil-exporting countries in the Gulf region to develop alternative export routes.

Saudi Arabia operates a 1,200km-long pipeline capable of transporting up to 5 million barrels of crude oil per day, according to the EIA.

In the past it has also temporarily repurposed a natural gas pipeline to carry crude oil.

The United Arab Emirates has connected its inland oilfields to the port of Fujairah on the Gulf of Oman via a pipeline with a daily capacity of at least 1.5 million barrels.

Oil could be diverted along the alternate infrastructure to bypass the Strait of Hormuz, but Reuters reports that would lead to a drop in supply of between 8-10 million barrels per day.

Credit: BBC

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