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

Why the Strait of Hormuz Matters in the Iran War

Strategic Ceasefire and Fuel Prices

A temporary truce between Iran and the United States hinges on ensuring unimpeded transit through the strategic Strait of Hormuz. The agreement was reached after Iran effectively closed the vital waterway, which serves as a critical artery for global energy shipments, following attacks by the U.S. and Israel on 28 February. The strait facilitates the movement of roughly 20% of the world’s oil and liquefied natural gas (LNG), and tensions had driven global fuel prices to unprecedented levels. Shortly after the ceasefire announcement, oil prices dropped by approximately 15%, easing concerns over supply disruptions.

Geographical Significance

Located between Iran to the north and Oman, alongside the United Arab Emirates (UAE), the strait measures just 50 kilometers wide at its entrance and exit, narrowing to 33 kilometers at its most constricted point. This narrow passage links the Persian Gulf to the Arabian Sea, making it essential for maritime trade. The strait’s depth allows the largest crude oil tankers to navigate safely, and it is used by major Middle Eastern producers and consumers of oil and LNG. In 2025, an estimated 20 million barrels of oil and related products passed through the strait daily, representing nearly $600 billion in annual energy trade.

The corridor also handles a third of the world’s fertiliser exports, with natural gas playing a key role in its production. Simultaneously, it serves as a crucial entry point for goods like food, medicines, and technology into the Middle East. Normally, around 3,000 ships traverse the strait monthly, but recent hostilities have sharply reduced this number, as Iran threatened to target commercial vessels and other traffic.

Security Threats and Military Response

At its narrowest, the strait and its shipping lanes lie entirely within the territorial waters of Iran and Oman, according to U.N. maritime law. This proximity has made the route a prime target for Iranian military assets, including drones, missiles, fast attack boats, and potentially mines. By 2 April, United Against Nuclear Iran reported at least 24 commercial ships had been damaged, with three more suffering near misses during the conflict.

“You can be attacked, and you can’t get insurance or it is extremely expensive,” said Arne Lohmann Rasmussen, a leading energy market analyst at Global Risk Management, during the period of instability.

The U.S. has maintained its military presence primarily through air strikes, avoiding direct deployment of warships to the strait. On 18 March, for instance, the U.S. military bombed Iranian anti-ship missile installations along the passage. President Trump had previously urged allies and even China to send naval forces to protect Hormuz, but his call for support received limited traction. He later asserted that the U.S. could manage the situation independently.

Economic Ripple Effects

Disruptions in the strait have had far-reaching consequences. China, for example, absorbs nearly 90% of Iran’s oil exports, making it a key player in the crisis. Across Asia, fuel shortages have prompted governments to take drastic measures, including remote work mandates, shortened workweeks, and early university closures. In Africa, South Sudan and Mauritius implemented electricity rationing, while in Europe, Slovenia became the first EU nation to enforce fuel restrictions.

Historically, the strait has seen similar threats. During the Iran-Iraq war in the late 1980s, strikes on oil infrastructure escalated into a “tanker war,” where both nations targeted neutral ships to impose economic pressure. Kuwaiti tankers carrying Iraqi oil were particularly vulnerable. The U.S. eventually deployed warships to safeguard maritime traffic, a strategy now being revisited amid current tensions.