BY EVRİM KÜÇÜK
The possibility of a U.S. intervention in Iran has once again brought the Strait of Hormuz into focus, as it raises the risk that Tehran could disrupt one of the world’s most critical energy transit routes.
The prospect of Venezuela resuming oil exports has helped balance oil prices, but markets are not overlooking mounting supply risks linked to escalating unrest in Iran and the Strait of Hormuz. After ending last week on a strong note, oil prices have entered the new week with renewed attention on Middle Eastern tensions.
The intensification of protests in Iran and sharp warnings from Tehran directed at the United States and Israel have revived supply disruption scenarios in the market. Iran, which produces around 3.2 million barrels of crude oil per day and exports roughly 2 million barrels, is the fourth largest producer in OPEC. Concerns that a potential military or political escalation could affect not only Iran’s production but also the Strait of Hormuz the most critical transit point for global oil trade are being priced in.
Reports that U.S. President Donald Trump is considering intervention options against Iran have further heightened tensions. Brent crude prices moved toward $64 per barrel on Monday, while U.S. benchmark WTI hovered around the $60 level. According to Andy Lipow, president of Lipow Oil Associates, merely raising the prospect of a closure of the strait could push oil prices up by several dollars in the unlikely event of a full closure, prices could rise by $10-20 per barrel.
Attacks on Russian energy infrastructure
Markets are also questioning whether such a scenario could prompt Tehran to take steps that disrupt oil shipments through the Strait of Hormuz. Connecting the Persian Gulf with the Arabian Sea, this narrow waterway carries roughly one third of the world’s seaborne crude oil trade.
Meanwhile, Ukraine continues to target Russian energy infrastructure. Over the weekend, forces struck three platforms owned by Lukoil in the Caspian Sea. Ukraine has been targeting all segments of Russia’s oil supply chain from production facilities and pipelines to ports and refineries. Russian supply is under increasing risk due both to these ongoing attacks and to the possibility of tougher U.S. sanctions on Russian energy.
Why is the Strait of Hormuz so critical?
Approximately 13 million barrels of crude oil pass through the Strait of Hormuz each day, accounting for nearly 30% of global seaborne oil flows. Even short lived disruptions in the strait can trigger sharp price volatility. Experts note that while a full closure scenario remains unlikely, a rapid rise in the risk premium would be unavoidable.
Iran could use this leverage if it feels cornered
Energy analysts warn that a military confrontation could push Iran to target the Strait of Hormuz as a last resort. Saul Kavonic, head of energy research at MST Marquee, cautions that a misstep especially if the regime feels cornered could trigger a global oil and natural gas crisis. Rapidan Energy Group President Bob McNally estimates the probability of limited U.S. strikes on Iran at 70%, noting that such a scenario would pose far greater global risks than the Venezuela case.
A low probability scenario
Nevertheless, most analysts emphasize that a complete closure of the Strait of Hormuz remains a low probability outcome. The strong U.S. naval presence in the region and Iran’s limited capacity to sustain a prolonged shutdown are cited as key constraints. According to Kpler analysts, Iran could unsettle markets by harassing tankers or causing temporary disruptions, but the direct impact on physical supply would likely remain limited.
