Global supply lines at risk: Iran’s Strait of Hormuz alert sends shock through global trade

An official from the European Union Naval Force Aspides said on Saturday that vessels have been receiving VHF transmissions from Iran’s Revolutionary Guards warning that “no ship is allowed to pass the Strait of Hormuz.” 

The strait is the world’s most vital oil export route, connecting the biggest Gulf producers — such as Saudi Arabia, Iran, Iraq and the United Arab Emirates — with the Gulf of Oman and the Arabian Sea. 

The warning has jolted global markets and placed the narrow waterway at the centre of mounting tensions following the joint US-Israel strike on Iran. As the conflict threatens to spill beyond direct military exchanges, all eyes are now on this 33-kilometre-wide corridor through which roughly a fifth of the world’s seaborne oil supply moves every day. 

A strategic chokepoint 

The Strait of Hormuz has long been viewed as one of the most sensitive geopolitical flashpoints in the world. Its geography gives Iran control over its northern coastline, while Oman sits to the south, creating a bottleneck where even limited military action — or the threat of it — can disrupt global trade. 

The warning transmissions are reportedly linked to Iran’s powerful Islamic Revolutionary Guard Corps, which oversees much of the country’s naval operations in the Gulf. While a full blockade would be difficult to sustain and costly for Tehran itself, even partial interference — such as harassment of tankers, mining operations or missile threats — could sharply escalate tensions. 

How much trade passes through? 

The economic weight of the strait is immense. An estimated 20–25% of global petroleum liquids consumption — around 17 to 20 million barrels per day — transits through Hormuz. In addition, nearly a fifth of the world’s liquefied natural gas shipments, particularly from Qatar and the UAE, pass through this narrow corridor. Beyond hydrocarbons, the route handles billions of dollars’ worth of container traffic, petrochemicals and other Gulf exports annually. For major Asian economies, including India, China, Japan and South Korea, a significant share of crude imports depends on uninterrupted access to this maritime artery. 

Why the world is watching 

The latest developments follow coordinated strikes by the United States and Israel on Iranian targets, dramatically intensifying an already volatile regional standoff. Analysts warn that Tehran could view the strait as a strategic lever — a way to exert pressure not just militarily, but economically. 

Energy markets react swiftly to uncertainty in Hormuz. Even without confirmed disruption, insurance premiums for ships rise, freight costs climb and crude prices spike on fears of supply constraints. For energy-importing nations across Asia and Europe, prolonged instability could feed inflation and strain economic growth. 

Military risks and global stakes 

Western naval forces, including European and US patrols, regularly operate in and around the waterway to ensure freedom of navigation. Any attempt to block transit risks direct confrontation at sea — a scenario that could widen the conflict beyond targeted strikes. 

Beyond oil, the strait also carries significant volumes of liquefied natural gas, making it critical not only for transportation fuels but also for power generation and heating across multiple continents.