Potential closure of Strait of Hormuz awaits Iran's Supreme Security Council approval

Iran's decision to close the Strait of Hormuz remains pending approval from its Supreme National Security Council, despite reports suggesting parliamentary authorization. The announcement comes amid escalating regional tensions, particularly between Iran and Israel. An Iranian Revolutionary Guard leader, MP Esmail Kosari, confirmed that the option to close the vital waterway is being considered and will be executed if deemed necessary.

The Strait of Hormuz is one of the world’s most critical maritime passages, facilitating over 21 million barrels of oil daily, in addition to a third of global liquefied natural gas exports. Any disruption here could cause significant disturbances in global energy and shipping markets.

Concerns have heightened since Israeli airstrikes began on Iranian territory on June 13, prompting major shipping companies to reduce traffic through the strait. Insurance costs for vessels have surged sharply, rising over 60% in recent days.

Economic experts warn of severe consequences should the strait close, as major Gulf countries like Saudi Arabia, the UAE, and Kuwait depend on this route for exporting oil to Asia. Qatar, a leading liquefied natural gas exporter, sends nearly all of its production through this narrow channel.

Though Tehran has threatened to close the Strait of Hormuz before, it has yet to follow through, mindful of the potential damage to its economy and strategic partners, especially China, which imports more than 75% of Iran’s oil exports.

Strategically located between the coasts of Oman and Iran, the strait connects the Persian Gulf to the Gulf of Oman and Arabian Sea. At its narrowest, it spans roughly 33 kilometers wide, with shipping lanes only about three kilometers wide in each direction.

A recent report highlighted the global impact of any closure, particularly on liquefied natural gas supplies, with Europe likely to face price shocks if Qatari exports, which account for about 20% of global gas trade, are disrupted.

The US Energy Information Administration has noted that unused oil pipeline capacity in the UAE and Saudi Arabia, totaling around 2.6 million barrels per day, could temporarily offset any blockage in the strait.