Global Oil Markets on Edge as U.S.-Iran Tensions Threaten Strait of Hormuz
Geopolitical risk is flaring again in the Middle East, with rising speculation over potential U.S. military action against Iran refocusing markets on one of the world’s most critical energy chokepoints: the Strait of Hormuz.
Following reports that the Trump administration is weighing options against Tehran amid domestic unrest in Iran, industry analysts warn that any confrontation could prompt Iran to disrupt the narrow waterway linking the Persian Gulf to global markets. Nearly a third of all seaborne crude oil—approximately 13 million barrels per day—passes through this strategic artery.
“A disruption through the Strait of Hormuz could cause a global oil and gas crisis,” said Saul Kavonic, head of energy research at MST Marquee. He highlighted the “desperate and ill advised lengths” Iran might consider if its leadership felt cornered.
The prospect of supply disruption has reintroduced a premium into oil markets, though analysts emphasize that a full and prolonged closure remains a low-probability, high-impact scenario. Bob McNally, president of Rapidan Energy Group, assigns a 70% likelihood to selective U.S. strikes but notes that Iran’s larger production and export footprint compared to Venezuela means any conflict would send stronger ripples through global supply chains.
“The fear of a closure will cause the price of oil to rise a few dollars per barrel, but it is the complete closure that can result in a $10 to $20 per barrel spike,” said Andy Lipow, president of Lipow Oil Associates.
Current market fundamentals, however, may cushion the shock. Kpler data indicates the oil market is tilting toward oversupply, with excess supply exceeding 3 million barrels per day in February and March. Moreover, experts question Iran’s ability—and willingness—to sustain a blockade given U.S. naval presence and complex regional dynamics.
“Iran can always threaten to close the Strait, but they may not want to do so… and may not have the capability to fully close it,” said Muyu Xu, senior crude analyst at Kpler.
Unlike the recent intervention in Venezuela, experts caution that Iran presents a far more complex and risky geopolitical scenario. Its distance from U.S. soil, entangled regional alliances, and significant energy infrastructure make a direct replication of the Venezuela playbook unlikely.
“It would be very difficult for the U.S. to adopt a strategy toward Iran similar to Venezuela,” Xu added, noting that Trump’s current focus appears to be consolidating influence in the Western Hemisphere.
While an immediate price spike would follow any military action, analysts expect markets to recalibrate quickly if disruptions appear temporary. The more probable response, should tensions escalate, would involve strengthened sanctions and targeted enforcement rather than large-scale military engagement.
For now, the specter of Hormuz disruption serves as a stark reminder of the fragile balance in global energy security, where geopolitical decisions in Washington and Tehran can swiftly reverberate through oil markets worldwide.
