Can Iran Fully Block the Strait of Hormuz?
By Łukasz Zembik | 4 March 2026
Overview
Tensions in the Strait of Hormuz have escalated following threats from Iran’s Revolutionary Guard to attack vessels in the area. This has led to a spike in oil and gas prices and has complicated shipping conditions. Despite these tensions, market reactions have been relatively calm, as investors believe a full blockade is unlikely due to Iran's limited military capabilities and the economic repercussions such a move would entail.
Impact on Asian Economies
Asian economies are particularly vulnerable to disruptions in the Strait of Hormuz, with China being the largest recipient of oil from this route, accounting for approximately 38% of the total. Other significant recipients include India (15%), South Korea (12%), and Japan (11%). In contrast, Europe only receives about 3% of its oil from this strait, indicating that any blockade would primarily impact Asian markets.
Current Oil Supply Conditions
The global oil market currently has a surplus supply and sufficient spare production capacity, which could stabilize prices for a few weeks. However, if tensions persist, energy prices could rise significantly. The European gas market is more precarious, with low storage levels leading to a stronger reaction in gas prices and greater pressure on European equities.
Consequences of a Full Blockade
A complete blockade would have dire consequences, including military responses from the U.S. and disruptions to Gulf states' oil exports, leading to declining revenues. Global financial markets would likely react negatively, with rising commodity prices and inflationary pressures. Even without a full blockade, current tensions have already increased shipping costs significantly, particularly for vessels linked to the U.S. and Israel.
U.S. Response
The U.S. has attempted to stabilize the situation by announcing that the Navy would escort tankers through the Strait of Hormuz and offering insurance guarantees for ships transporting oil. These measures aim to ensure the free flow of energy and mitigate the risk of a global energy crisis, although their implementation may take time.
Current Situation
Currently, around 40 supertankers are stranded in the Persian Gulf, each capable of carrying about 2 million barrels of oil. The Strait of Hormuz is crucial for global energy, with approximately 20 million barrels of crude oil and LNG passing through daily, representing a significant portion of global oil production and trade.