Strait of Hormuz on edge: Why Iran may threaten oil flow but won’t risk shutting it down

Despite rising fears amid the Iran-Israel conflict, multiple defense analysts and energy economists believe a full closure of the Strait of Hormuz by Iran remains highly improbable. Their view: Tehran may escalate rhetoric or harass vessels, but halting the world’s busiest oil route would be an act of economic self-sabotage.

The speculation follows Israel’s Operation Rising Lion, a sweeping aerial strike on Iranian nuclear and military sites. Tehran has vowed revenge, and hardline voices have floated the idea of blocking Hormuz—a narrow chokepoint through which 20% of global oil flows daily.

Why a full blockade remains unlikely, according to experts:

Self-inflicted damage: Iran exports most of its oil and imports vital goods through the Strait. Closing it would cripple its own economy and alienate key partners like China, which buys over 75% of Iranian crude.

Military risks: The U.S. Navy’s Fifth Fleet, along with UK and French allies, patrols the waterway. A full blockade would likely trigger Western military response.

Track record: Iran has issued similar threats in the past—including during the Trump-era nuclear tensions—but never followed through. “They’ve used the threat for leverage, not action,” one shipping analyst noted.

Markets already on the edge

Even without a closure, global oil markets are responding sharply. Brent crude jumped 11% in two days following the Israeli strikes, with prices projected to breach $100–120 per barrel if tensions escalate. The global LNG market, reliant on Qatari exports via Hormuz, is particularly exposed.

Rerouting and war risk insurance premiums have risen. Some shipowners are avoiding Gulf lanes, bracing for potential Iranian retaliation or maritime flashpoints.

How it impacts India

India, which imports about two-thirds of its crude and nearly half of its LNG through Hormuz, stands to lose significantly in case of disruption:

Energy prices: Surging oil and gas costs could spike domestic inflation, especially in transport and food.

Currency pressure: Rising import bills would widen the current account deficit and weaken the rupee.

Sectoral impact: Aviation, logistics, tyres, and manufacturing sectors could face cost surges.

Though India holds strategic oil reserves, experts caution these are built for short-term supply shocks—not sustained disruption from a regional war.