With oil prices soaring, the most concerning question in the market is: Will the Strait of Hormuz be closed?

With the outbreak of the Israel-Iran conflict, geopolitical tensions have intensified, and the market is concerned that Iran may block one of the world's most important oil arteries, the Strait of Hormuz.

The Strait of Hormuz connects the Persian Gulf and the Arabian Sea, with approximately 20 million barrels of oil and oil products transported through it daily, accounting for nearly one-fifth of global oil transportation. A blockade would have a tremendous impact on the global energy market.

On Friday, June 13, several analysts pointed out that the likelihood of Iran completely blocking the Strait of Hormuz is extremely low. On one hand, the strait is too wide, with some waters belonging to Oman, making it physically difficult to completely block. Moreover, Iran itself relies on this route to import a large amount of essential goods. On the other hand, a blockade could harm Iran's oil customers, leading to backlash.

Although the likelihood is low, as the situation continues to escalate, some analysts have begun to seriously consider this extreme scenario. Kpler analysts stated that the current situation is extreme and cannot completely rule out the worst-case scenario.

On Friday, crude oil surged more than 10%, while safe-haven assets like gold saw significant increases, and global stock markets collectively declined.

Iran's actions carry high risks and low rewards, and it is physically impossible to completely block

Many energy experts generally believe that the likelihood of Iran fully blocking the strait is very low.

First, from a strategic perspective, there are no substantial benefits to blocking the Strait of Hormuz, especially since its domestic oil facilities are not currently direct targets of attack. On the contrary, such actions are likely to provoke severe international retaliation, causing oil prices to soar and further inciting dissatisfaction and even opposition from Iran's main oil customers. A blockade would not only harm the "enemies" but also implicate Iran's "friends."

Second, from an economic perspective, a large amount of essential goods in Iran relies on imports through this route. If the strait were to close, Iran itself would be the first to suffer.

From a geographical and military standpoint, experts believe that it is also very difficult for Iran to physically achieve a complete blockade.

The Strait of Hormuz connects the Persian Gulf and the Arabian Sea, spanning 35 to 60 miles, with most of the waters belonging to Oman rather than Iran. Due to the width of the strait, it is nearly impossible for Iran to physically implement a complete blockade. While many vessels do pass through Iranian waters, they can still navigate through the waters of the UAE and Oman, not entirely relying on waterways controlled by Iran.

Furthermore, in the context of the U.S. Fifth Fleet stationed in Bahrain, it is almost unrealistic for Iran to maintain long-term control or even close the strait. Historically, despite Iran's multiple threats to close the Strait of Hormuz in 2011, 2012, and 2018, it has never taken real action, precisely because of various practical constraints However, experts also remind that although the probability of a full blockade is extremely low, Iran may still interfere with maritime shipping through attacks on oil tankers and laying mines.

Vivek Dhar, head of minerals and energy research at the Commonwealth Bank of Australia, believes that blocking the Strait would be Iran's "last resort," and it may only be truly implemented in the event of direct military conflict with the United States. President Trump has warned that if negotiations over the nuclear deal with Iran break down, military action cannot be ruled out. However, it is still uncertain whether these threats are genuine intentions to use force or merely tactics to exert pressure and increase leverage in negotiations.

Analysts Warn: While Still Unlikely, It Cannot Be Completely Ruled Out

According to CCTV News, the commander of the Islamic Revolutionary Guard Corps, Hossein Salami, and the head of the Iranian armed forces, Bagheri, were killed in an attack on Israel.

Although the possibility of blocking the Strait of Hormuz remains very low, the escalating situation has led some analysts to seriously consider this extreme scenario.

Amena Bakr, head of Middle East and OPEC+ intelligence at Kpler, stated:

“Blocking the Strait does sound like an extreme scenario, but the situation itself is already very extreme.”

“So I wouldn't completely rule out this possibility; we need to take it into consideration.”