What is and why does the blockade threaten the world economy?

As a consequence, the Strait of Hormuz was closed for security reasonsaccording to information released by the Iranian state agency Tasnim.

“The Revolutionary Guard has warned several vessels that due to unsafe conditions around the strait resulting from US and Israeli military aggression and Iranian responses, passage through the strait is currently unsafe,” Tasnim quoted the Guard as saying.

But after all, what is the Strait of Hormuz and what is the global impact of closing this little piece of ocean?

What is the Strait of Hormuz: small in size, geopolitical giant

Located between the Persian Gulf and the Gulf of Oman, Hormuz is approximately 50 km wide at its entrance and exit, and approximately 33 km at its narrowest point. It is the main route for the flow of oil extracted from OPEC member countries (Organization of Petroleum Exporting Countries), such as Saudi Arabia, Iran, United Arab Emirates, Kuwait and Iraq.

Despite its importance for the world economy – given that a fifth of the world’s oil consumption passes through the Strait of Hormuz, the maritime canal could go unnoticed by an unsuspecting spectator looking at the Earth’s Globe.

With two maritime routes that measure 3 kilometers each, the Strait of Hormuz is a daily route for around 20 million barrels of oil, whose main destination is the Asia-Pacific region. However, it has a strong presence in the European and North American markets.

According to the United States Energy Information Administration (EIA, acronym in English), 82% of oil shipments that pass through Hormuz have their final destination in China, India, Japan and South Korea.

As the conflict escalated in July 2025, American Secretary of State Marco Rubio asked China to intervene with Iran if Hormuz was blocked at the time. “If they close the strait, it will be economic suicide for them. We have options to deal with this, but other countries should also pay attention. This would affect them economically much more than us”, analyzed Rubio.

According to the EIA report published last year, a blockage in the Strait of Hormuz could hold back 20% to 25% of the world’s oil exports. The blockade tends to cause an immediate spike in commodity prices.

What is the economic impact of closing the Strait of Hormuz?

The closure of the route in the Strait of Hormuz could cause a sharp rise in oil prices and trigger turmoil on stock markets around the world. The interruption of maritime traffic is capable of compromising the flow of commodities, which may remain trapped in Middle Eastern ports, worsening the perception of scarcity.

Gulf countries tend to be particularly affected, as their economies depend significantly on oil and gas exports. A prolonged lockdown would directly hit their revenues, logistics chains and fiscal stability.

Furthermore, the impacts would not be limited to the energy sector. The Strait of Hormuz is a strategic route for transporting plastics, automobiles, fertilizers, electronics and chemicals. Its ban has the potential to affect global supply chainsexpanding the economic effects far beyond the oil market.

What have been the impacts of the closure of the Strait of Hormuz so far?

After the closure of the Strait of Hormuz, announced last Sunday (01), the economic effects began to materialize. According to a JPMorgan report, the flow of imports of oil barrels through the route fell by around 75%.

In a publication on the bank’s official website, Natasha Kaneva, head of Global Commodities Strategy at the institution, highlighted that “regime changes in oil-producing countries — whether leadership transitions, coups d’état, revolutions or major political transformations — can have a profound impact on oil policy, production and global oil prices, both in the short and long term”.

In the financial market, Brent oil rose 10% at the opening of the Asian market this Monday (02). Throughout the morning, however, prices lost strength, amid adjustment movements.

In an interview with CNN, economist Robson Gonçalves, from Fundação Getúlio Vargas (FGV), warned of more severe consequences if the interruption continues. “The increase in the price of oil quickly becomes global inflation. Freight costs become more expensive, inputs rise and the final cost ends up reaching the consumer”, he explained.

The route has an extensive history of tensions

The Strait of Hormuz route has been used for decades as an instrument of pressure on the international geopolitical board. As a result, the canal and the entire region around it remain under constant tension, marked by recurring episodes of instability.

One of The most emblematic moments of this escalation occurred in the 1980s, during the so-called “Oiler Ship War”.in the context of the Iran-Iraq War.

Amid the invasion of Iranian territory, Saddam Hussein ordered attacks on Iranian oil installations with the aim of causing the closure of the strait, a move that could pressure the United States’ entry into the conflict alongside Iraq.

The strategy, however, did not materialize. Iran has redirected its military efforts against Iraqi targets, keeping the sea route open and functional.

In 1988, still under a climate of hostility, the strait was the scene of one of the most controversial episodes in civil aviation. United States Navy forces mistakenly shot down Iran Air Flight 655, resulting in the deaths of all 290 civilians on board. The episode, which deepened tensions, remains a tragic symbol of volatility in the region.