What is the Strait of Hormuz? How will the World be affected by Oil trade

US President Donald Trump’s attack on Iranian nuclear sites on Saturday has triggered massive and growing conflicts in the Middle East. The Iranian parliament now has agreed upon closing the Strait of Hormuz, a vital trade route for trade as retaliation. 

Joining the Israeli government in the attack against Iran on Saturday has now led to the world awaiting Iran’s actions which was discussed to start from shutting down the trade path. The Strait of Hormuz is crucial in oil trade and is through which over a fifth of the world’s oil supply, 20m barrels, and much of its liquified gas, passes each day.

What is the Strait of Hormuz?

A geo strategic oil chokepoint, the Strait of Hormuz is one of the crucial gateways for oil transportation in the world. The point is important to world nations such as the US in the west and the whole of Asia in the east as the world economy runs on oil trade. 

The Strait of Hormuz is located between Iran and Oman and links the Gulf of Oman and the Gulf to the North. It stretches to 33 km wide and its narrowest turn shipping lane is just 3km. The importance of the Strait can be better understood as nearly One Fifth of the total Oil consumption passes through the Strait of Hormuz. 

From the beginning of 2022 till May 2025, approximately 17.8 million to 20.8m barrels of crude, condensate and fuel pass through daily. Saudi Arabia uses the strait to export around 6m barrels of crude oil per day, more than any neighbouring country, as per reports from Vortexa, a data analytical company. 

Saudi Arabia, Iran, The United Arab Emirates, Kuwait, Iraz – the Members of the Organization of the Petroleum Exporting Countries (OPEC) use the Strait of Hormuz to transport oil mostly and mainly to Asia. 

What happens if the Strait is closed?

Iran’s tactful move towards deciding on closing the Strait will directly affect the export of commercial oil to the US and affect Donald Trump, as oil prices would spike sky high with immediate inflation. 

Along with the US, the Arabian countries lining with Iran and criticising the Israel attack will also be affected as they also use the Hormuz channel for oil trade and imposing shut down will make countries like Kuwait, UAE, Iraz act on their own interests, affecting Iran’s gain too. 

US has also asked for China’s assistance in purusading Iran to not close the Strait as shared interests and gain are at stake with China importing nearly 90% of Iran’s Oil. China’s influential part will be vital as the World’s second largest economy has yet to take sides but commented quoting UN chief Guterres’ statement calling US strike on Iran a ‘dangerous escalation’.