Why the Strait of Hormuz Matters So Much in the Iran War
The U.S. and Iran have reached an agreement to halt hostilities, contingent upon ensuring “safe passage” through the Strait of Hormuz. Since the February 28 attacks by the U.S. and Israel, Iran had effectively restricted the vital waterway, a key route for global oil shipments. The strait, which facilitates the transit of approximately 20% of the world’s oil and liquefied natural gas (LNG), saw its flow disrupted, causing a sharp rise in fuel prices. Following the ceasefire announcement, global oil prices dropped by roughly 15%.
A Strategic Waterway
Bounded by Iran to the north and Oman, along with the United Arab Emirates (UAE), to the south, the strait is only about 50 kilometers wide at its entrance and exit, narrowing to 33 kilometers at its central point. Its depth accommodates the largest crude oil tankers, making it essential for Middle Eastern oil and LNG producers, as well as their international buyers. In 2025, an estimated 20 million barrels of oil and related products traversed the strait daily, according to the U.S. Energy Information Administration (EIA). This equates to nearly $600 billion in annual energy trade.
While Iran is a major supplier, the strait also carries oil from Iraq, Kuwait, Qatar, Saudi Arabia, and the UAE. Approximately 20% of global LNG trade, primarily from Qatar, also flows through the waterway. The U.S. government noted that in 2024, Qatar exported about 9.3 billion cubic feet per day (Bcf/d) of LNG, with the UAE contributing 0.7 Bcf/d. LNG, which is gas converted into liquid form for easier transport, is reconstituted into gas at its destination for use in energy applications.
Impact Beyond Energy
Disruptions in the strait have affected more than just oil markets. Fertilizer exports from the Middle East, heavily reliant on natural gas production, also depend on the waterway. Around a third of global fertilizer trade typically moves through it. Additionally, the strait is vital for imports to the region, including food, medicines, and technology. Before the conflict, about 3,000 ships passed through monthly, but this number dwindled significantly during the hostilities.
Iran’s threats to target tankers and ships have raised concerns. Under United Nations regulations, countries can claim territorial waters up to 12 nautical miles from their shores. At the strait’s narrowest point, shipping lanes fall entirely within Iranian and Omani waters. Iranian drones, missiles, fast attack boats, and possible mines posed a major threat to vessels navigating the channel. By April 2, United Against Nuclear Iran reported at least 24 commercial ships had been struck, along with three near-misses.
Military Response and Historical Context
The U.S. has opted for air strikes over deploying warships to the strait. On March 18, the military confirmed bombing Iranian anti-ship missile sites near the waterway. Former President Trump had previously urged allies and China to bolster security by sending warships, but his call received limited support. He later asserted that the U.S. could manage the situation independently.
Historically, the U.S. has deployed military force to secure the strait. During the Iran-Iraq war in the late 1980s, strikes on oil facilities escalated into a “tanker war,” with both nations attacking neutral ships to disrupt trade. Kuwaiti tankers transporting Iraqi oil were particularly at risk. This precedent highlights the strait’s role in global economic stability, as its closure could have severe repercussions on energy markets and regional supply chains.
“You can be attacked, and you can’t get insurance or it is extremely expensive,” said Arne Lohmann Rasmussen, chief analyst at Global Risk Management, during the ongoing instability.
