Strait of Hormuz: closure would push oil prices to new records

For many, the Strait of Hormuz will mean very little. Perhaps they would hardly be able to indicate it on a map.

If the Gulf of Oman, located between the coasts of Oman and the southern ones of Iran, represents the crucial point in the global geopolitical panorama, the Strait of Hormuz is its armored door. Around 40% of the world's oil passes through this port which separates the Gulf of Oman from the Persian Gulf, and plays a major strategic role. Today more than ever. It is in fact through this passage that one accesses the Persian Gulf, a large inlet that extends for approximately 2400 kilometers and is home to several coastal nations, including Iran, Iraq, Kuwait, Saudi Arabia, Bahrain, Qatar and Oman. Hormuz is the world's main oil hub and a crucial hub for global hydrocarbon trade.

You can therefore imagine what could happen if, suddenly – or perhaps not – the door closed forever.

Blocking the Strait of Hormuz would mean turning off the oil taps of half the world. Including Italy. The scenario is not so dystopian. The seizure of the Aries container ship in the Strait of Hormuz (because it can be traced back to Israel) in recent days arrived like a perfect storm, raising the crisis in the sector to the highest levels, already under pressure due to the Houthi maritime attacks in the Red Sea, which disrupted trade routes and increased transportation costs. The recent escalation with Iran's attack on Israel further aggravates the situation, leading to questions about what the next development might be.

There is a real risk that the price of petrol will increase at the pumps in the next few hours, according to analysts, while less troubled waters are expected on the oil front. After all, threats from Iran – which controls the strait – have been repeated cyclically for 40 years now. However, one certainty remains: the Iranian attack on Israel and the tensions that have moved, physiologically, to the Strait of Hormuz, cause a certain concern because they jeopardize the fate – and costs – of a fifth of the world's oil.

With approximately twenty million barrels of crude oil and natural gas traveling through this vital strait every day, its strategic importance from an energy point of view is indisputable. Approximately 60% of the ships passing through the strait are tankers and methane tankers, while the rest is mainly made up of container ships and general cargo ships. Although the transportation of dry bulk cargo such as coal and steel is less significant, the numbers speak volumes about the crucial importance of this strait for global trade and energy stability.

If we were therefore to follow up on the threats of the commander of the Iranian Revolutionary Guard Navy to put a padlock on the passage of ships in the strait, we would find ourselves faced with a scenario in which Brent (i.e. the type of oil most traded in the world) could reach to cost up to between 100 and 130 dollars a barrel.

What is frightening is not so much the closure of the strait but rather the possibility of attacks on oil infrastructure in the area and once again turns the spotlight on the vulnerability of raw materials in complex geopolitical contexts, such as the current ones.