A risky bluff? Why Iran can’t afford to shut the Strait of Hormuz

The Strait of Hormuz channels about 20 million barrels of oil per day, roughly 20% of global petroleum, along with significant LNG volumes. In theory, Iran could use its submarines, fast-attack boats, UAVs, and shore-launched anti-ship missiles to disrupt maritime traffic.

But analysts emphasize Iran’s limitations: “Iran is not capable of completely closing the strait”, says Atlantic Council’s Daniel Mouton. The waterway’s width, existing navigation routes, and international naval deterrence diminish the likelihood of a total blockade.

Any disruption would dramatically lift oil prices worldwide. Citigroup forecasts Brent crude could surge to $90 per barrel, with more prolonged or total closure possibly pushing prices even higher. Reuters echoed that any shutdown would trigger sharp price spikes. 

For Iran itself, the consequences would be dire. With its oil sector heavily reliant on Gulf exports, a full closure would choke off its primary export revenue source at a time when sanctions have already crippled growth.

In a worst-case disruption, U.S. domestic energy production would soften the blow to the American public. Recent reports note that U.S. oil output now exceeds consumption, buffering domestic prices against Gulf turbulence. In contrast, Iran would be economically exposed with no similar insulation.

A full closure would be seen in Washington as a strategic red line. Axios reports that U.S. officials view a blockade by Iran as an escalation warranting direct military response . Historically, U.S. naval reactions such as Operation Earnest Will and Operation Praying Mantis in the 1980s illustrate rapid force projection to clear the strait.

Marko Papic of BCA Research calls the blockade Iran’s “nuclear option,” likely yielding swift containment and then reopening within two to three weeks, with markets overreacting in the interim. Despite heightened tensions, markets remain wary—not panicked.