Strait of Hormuz: Why It's the World's Most Critical Oil Chokepoint

The Strait of Hormuz is a 21-mile-wide waterway separating Iran from Oman's Musandam exclave. It is the only sea route from the Persian Gulf to the open ocean — which means every barrel of oil loaded in Saudi Arabia, the UAE, Kuwait, Qatar, Iraq, Bahrain, and Iran has to pass through it. Roughly one out of every five barrels of oil consumed worldwide travels through that narrow channel, alongside about a third of all seaborne liquefied natural gas (LNG). When headlines say a Strait closure would be a global economic emergency, this is why. You can follow the live blockade status on our Strait of Hormuz tracker and watch the spillover effect on prices on the Oil & Energy dashboard.

Where exactly is the Strait?

At its narrowest point, the navigable shipping channel is just two miles wide in each direction — inbound and outbound — separated by a two-mile buffer. The channel hugs Omani waters on the southern side to keep clear of Iranian territorial claims to the north. Iran controls the long northern coastline, the islands of Greater and Lesser Tunb, and Abu Musa, all of which sit close to the shipping lanes. The Iranian coast is mountainous, deeply indented, and dotted with naval bases at Bandar Abbas, Bandar-e-Jask, and Chabahar, giving the Islamic Revolutionary Guard Corps (IRGC) Navy excellent shore-to- ship missile, mine-laying, and small-boat options.

How much oil actually moves through it?

Pre-conflict, the Strait carried about 20–21 million barrels of oil per day in liquid form, roughly 20% of global oil consumption and close to a third of all seaborne crude. On the gas side, Qatar — the world's second-largest LNG exporter — sends nearly all of its output through Hormuz. There is no full-volume bypass: Saudi Arabia operates the East-West Petroline (5 million bpd), and the UAE has the Habshan-Fujairah pipeline (~1.5 million bpd) that exits to the Gulf of Oman. Combined, those alternatives can replace less than a third of the Strait's daily flow.

Why a small chokepoint matters globally

Modern oil markets are highly substitutable in normal conditions — but only at the margin. A 5–10% global supply shock cannot be replaced overnight, because there is very little spare capacity that is both unsold and physically deliverable. Strategic petroleum reserves help, but releases take weeks to reach refineries. Even the rumor of a Strait closure typically adds $10–25 to a barrel of Brent crude inside 48 hours, which translates into 25–60 cents per gallon of gasoline at US pumps within 7–14 days. For a deeper look at the consumer-side effect, see How the Iran-US War Affects Gas Prices at the Pump.

How a closure actually works

A "closure" doesn't require Iran to physically block the lanes. It only requires shipping insurance markets — primarily the London-based International Group of P&I Clubs and Lloyd's syndicates — to suspend coverage for transits, which they do quickly when state actors begin laying mines or firing on tankers. Without insurance, no major oil major or large bank will charter or finance a transit. The 2026 IRGC blockade combined three classical tools: naval mines (cheap, hard to clear), fast-attack craft and shore-based anti-ship missiles (Noor, Qader, Hoot torpedoes), and electronic warfare against vessel transponders.

Reroute options

When the Strait closes, ships have to take the long way around the Cape of Good Hope. From Ras Tanura to Rotterdam, the diversion adds about 14 days and roughly 3,500 nautical miles each way. Daily charter rates for Very Large Crude Carriers (VLCCs) doubled within a week of the 2026 closure, and clean-product tankers serving Asia jumped 70% in the same period. We track the route shift continuously on the Oil & Energy dashboardunder "Alternative Shipping Routes."

What stops a permanent closure?

Three forces pull against a sustained shutdown. First, Iran itself depends on Hormuz to export its own crude — sustained closure starves Tehran's budget. Second, China, Iran's largest oil customer, applies private diplomatic pressure because its own refiners need the Persian Gulf flow. Third, the US Fifth Fleet, based in Bahrain, is structured specifically around mine-clearing, escort operations, and surface-warfare capacity in the Gulf. In previous Strait incidents (1987–88 "Tanker War" reflagging, 2019 Gulf of Oman attacks), reopening came within weeks rather than months once those forces aligned.

Bottom line

The Strait of Hormuz is unique because there is no substitute for it at scale, no near-term replacement infrastructure, and no geographically neutral path around it. That gives Iran disproportionate coercive leverage during a crisis and makes every twitch of the blockade — a single mine, a single missile launch — a global price event. Bookmark the live tracker and the conflict timeline to watch how the situation develops.