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World's most vital oil chokepoint back in focus amid possible U.S. action against Iran
Escalating U.S.-Iran tensions have refocused global energy markets on the Strait of Hormuz, a vital maritime chokepoint through which nearly a third of the world’s seaborne crude oil flows. Reports that the Trump administration is weighing options against Tehran amid domestic unrest in Iran have raised the specter of potential supply disruptions, though analysts caution that a full-scale crisis remains unlikely.
Approximately 13 million barrels per day transited the strait in 2025, making any sustained blockage a catastrophic event for global energy security. “A disruption through the Strait of Hormuz could cause a global oil and gas crisis,” warned Saul Kavonic, head of energy research at MST Marquee, noting the risk of “desperate and ill advised lengths” Iran might take if cornered.
Analysts highlight a stark contrast with recent U.S. intervention in Venezuela. Iran’s larger production and strategic location make any military engagement far riskier. Bob McNally of Rapidan Energy Group assigns a 70% probability to selective U.S. strikes but emphasizes the complexity of Middle Eastern geopolitics compared to Latin America.
Price Impact and Market Fundamentals
In an extreme scenario, oil prices could spike $10 to $20 per barrel, according to Andy Lipow of Lipow Oil Associates. However, current market fundamentals provide a cushion: Kpler data indicates an oversupply of roughly 2.5 million to 3 million barrels per day in the first quarter, which would help absorb temporary shocks.
Moreover, Iran’s ability to fully close the strait is considered limited given U.S. naval presence, and any attempt would likely trigger a swift international response to restore flow. Most experts anticipate a strategy centered on sanctions and enforcement rather than direct military confrontation, aligning with Washington’s apparent focus on consolidating influence in the Western Hemisphere.
While the immediate risk premium has lifted prices, the consensus suggests that markets are pricing in volatility rather than a prolonged supply crisis—for now.
