What is the impact of Iran's announcement to close the Strait of Hormuz on oil trade?

As a "throat passage" for global energy trade, the Strait of Hormuz carries over 30% of the world's shipping of crude oil and 20% of liquefied natural gas. More than 90% of the Gulf region's oil exports rely on this narrow waterway. Since 2026, as the military standoff between the United States and Iran continues to escalate, Iran has once again announced its control and phased closure of the Strait of Hormuz, causing severe fluctuations in the global energy market. This blockade is not a short-term deterrent call, but a practical shipping control that directly impacts the global oil supply chain, shipping system, and energy price pattern, and has a multi-level and sustained profound impact on international oil trade.

The most immediate impact in the short term is the sharp rise in international oil prices, which quickly spreads market panic. The daily crude oil throughput in the Strait of Hormuz is as high as 20 million barrels. Once the waterway is restricted, it will directly create a supply gap of tens of millions of barrels per day. The current global idle oil production capacity is limited, and the total capacity of onshore alternative pipelines in countries such as Saudi Arabia and the United Arab Emirates is only 6.8 million barrels per day, which is completely unable to make up for the supply gap caused by the strait blockade. Driven by both supply-demand imbalance and risk aversion, Brent crude oil prices have risen sharply in the short term, with a maximum daily increase of over 13%, repeatedly hitting the 100 yuan mark. Under extreme market conditions, institutions predict that the highest oil price may reach $150 per barrel, approaching the level of historical oil crises and completely breaking the pattern of stable fluctuations in oil prices in recent years.

Secondly, global oil shipping costs have skyrocketed and trade efficiency has plummeted. The narrowest point of the strait is only 33 kilometers, and the main channel width is less than 3 kilometers, naturally possessing the geographical characteristics of easy blockade and difficult detours. After the closure of the waterway, the vast majority of oil tankers were forced to abandon the Persian Gulf route and detour around the Cape of Good Hope in Africa, increasing their one-way voyage by nearly 40% and extending the sailing time by 10 to 15 days, directly prolonging the oil trade turnover cycle. At the same time, the premium for war risk insurance for ships in the Middle East has soared from 0.25% to 7.5%, and the daily rental fees for ultra large oil tankers have skyrocketed several times. Coupled with the cost of fuel and labor for detours, the total cost of single ship shipping has significantly increased. The cost pressure ultimately spreads to upstream oil production and downstream consumption, leading to a comprehensive "high cost era" for global oil trade.

From the perspective of regional trade patterns, the Middle East oil export system is under pressure, with Asian and European consumer countries bearing the brunt. Asia is the core consumer market for Hormuz oil, with over 60% of imported crude oil from countries such as China, India, Japan, and South Korea relying on this waterway. The blockade of the strait has directly led to a sharp decline in the amount of oil arriving at ports and accelerated consumption of commercial inventories in various countries. Although Europe is gradually reducing its dependence on Middle Eastern crude oil, liquefied natural gas imports are still highly tied to Gulf producing areas such as Qatar, and restricted shipping routes directly impact the European energy supply system. The United States, relying on its domestic shale oil production capacity to hedge risks with the supply chain in the Americas, has the least direct impact and instead uses the global energy crisis to expand crude oil exports, forming an asymmetric trade advantage.

It is worth noting that Iran's blockade this time is a strategic game of "limited pressure and room for maneuver", rather than completely cutting off all shipping. Throughout the previous cross-strait crises, Iran has always followed the logic of "using blockades to promote talks and controlling prices" and will not completely cut off oil trade channels. Although a complete blockade of the waterway can severely damage the global market, it will also cause Iran's own oil exports and fiscal revenue to come to a complete halt, leading to a situation of killing one thousand enemies and losing eight hundred at its own expense. Therefore, this control is more of a combination of selective passage, militarized deterrence, and high-pressure control, prioritizing the restriction of US and related shipping, while preserving basic livelihood and conventional trade channels, in exchange for easing sanctions and geopolitical bargaining chips.

In the long run, this crisis will accelerate the restructuring of the global oil trade pattern. The repeated turbulence in the strait has exposed the fatal risks of a single energy channel, forcing countries to accelerate their energy diversification layout. On the one hand, Asian and European countries are accelerating the expansion of cross-border oil pipelines on land, increasing the scale of strategic oil reserves, and reducing dependence on a single sea route; On the other hand, global energy trade is accelerating its decentralization to the Middle East, with the proportion of crude oil trade in the Americas, Russian pipeline oil, and West African crude oil continuing to increase. At the same time, the pace of new energy substitution in various countries is further accelerating, fundamentally weakening the influence of fossil energy geopolitical games and reshaping the global energy pricing and trade system in the long run.