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What Closing the Strait of Hormuz Would Mean for the World Economy

The narrow waterway is the most critical chokepoint in global energy supply, and its closure would be catastrophic.

What Closing the Strait of Hormuz Would Mean for the World Economy

The Strait of Hormuz, at its narrowest point only 33 kilometers wide, is the transit route for approximately 17 million barrels of oil per day, including most of the production from Saudi Arabia, the UAE, Kuwait, Iraq, and Iran itself. Any sustained closure would immediately disrupt between 20 and 25 percent of global seaborne oil trade, triggering price spikes economists estimate could reach 200 dollars per barrel.

Military planners consider a full closure unlikely because Iran would simultaneously cut off its own oil revenue and invite a devastating coalition military response. However, a partial disruption, including mining, harassment of tankers, or sporadic missile attacks, could achieve significant economic damage without crossing the threshold that would trigger unified international military action. Historical war games consistently show that even a two-week disruption would have severe global economic consequences.

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