June 22, local time, the Iranian parliament in favor of closing the Strait of Hormuz news shocked the world.
The narrow waterway, described by the US energy information administration as“The world’s most important oil choke point”, is now a hot potato in the wake of America’s military adventure. While the final decision is in the hands of Iran’s top National Security Council, its parliamentary approval has sent a clear signal to the US that Iran’s trump card is on the table.
But after a US strike on Iranian nuclear facilities, US Secretary of State Rubio came out on the 22nd licking his face and calling on China to dissuade Iran from closing the Strait of Hormuz.
This card, is it really that powerful? This should first clarify the status of the Strait of Hormuz.
The strait is only 33 kilometres at its narrowest point and only three kilometres wide in both directions, with the territorial waters of Iran to the north and Oman and the United Arab Emirates to the south. Despite its narrowness, some 20m barrels of oil pass through it every day, accounting for more than 25 per cent of the world’s seaborne oil trade and 20 per cent of global daily consumption.
Not only does it transport crude oil, but it also liquefied natural gas (LNG) — which 2024 a fifth of the world’s LNG trade, mainly Qatari gas. If this energy transportation lifeline is blocked, upstream wells can not deliver oil, downstream refineries can not expect, the entire energy prices will rise a wave.
Isn’t there an alternative?
There are a few back-up routes, too. Saudi Arabia’s east-west pipeline carries up to 5m barrels a day, while the UAE’s Abu dhabi-fujairah pipeline has a capacity of just 1.8 m b/d. The pipelines, which cover less than a third of Strait of Hormuz’s flux, can not provide the full picture. Moreover, the maintenance cost is high, the production cycle is long, does not have the quick response ability.
The more realistic problem is that the alternative route would have to bypass the southern tip of Africa, adding tens of thousands of kilometers to the voyage, longer transport cycles, higher fuel costs, increased safety risks, and direct adjustments by insurance companies, put War risk fees into contracts, and costs multiply. In other words, it’s technically replaceable, but it’s very expensive and not very practical.
The EIA’s judgment is clear: the Strait of Hormuz is a critical node for global energy security, and there is no equivalent alternative. When the gateways are closed, whether in exporting or importing countries, stability in energy markets comes first, then global inflation, and finally a political ripple effect.
Understand the importance of the strait, and then see why the United States brazenly asked China to come out to put out the fire.
On the face of it, the US is already the world’s largest oil exporter in the 2024, and its oil exports have risen significantly, thanks largely to a surge in shale oil production, so America’s dependence on the Strait of Hormuz is low, with only 7% of its imported oil passing through.
But the global energy market is not a one-off game, and oil prices can not rise in other countries alone if Strait of Hormuz closes. Morgan Stanley directly warned that if the strait is fully closed, the international oil price will exceed 130 U. S. dollars a barrel. For the Donald Trump administration, it is not just a question of numbers, it is a question of elections. No matter how much money is made from exporting oil, it will all fall into the hands of the government and energy companies. The people will not get a single cent. With high inflation in the United States, no amount of slogans can hide the pressure of oil prices on people’s livelihoods.
Now the reaction is starting to show. Brent jumped 3.2% on June 22nd after US air strikes on three Iranian nuclear sites, followed by West Texas light crude. This is only a preliminary reaction. If it does, the market will move from“Reaction” to“Expectation”– and expectations are often magnified in ways that are more frightening than reality.
At that time, traders began to hoard oil to avoid risk, speculative capital speculation, consumer countries rush to order price increases, a round of rise in the futures market. Rising energy prices will feed through to the commodity chain: from transport to manufacturing, from steel and plastics to chemicals.
In the face of this chain reaction, the U. S. Treasury and Energy Department is inevitably nervous. So, once again, the familiar US playbook is to lobby Saudi Arabia and the United Arab Emirates to pump more oil while talking about drawing down the strategic petroleum reserve.
But the problem is, the strategic reserve is“First aid, not poor”, move less once; Saudi Arabia and the United Arab Emirates production flexibility is limited, they also have to take care of the balance of the home market, can not be arbitrarily accelerated. And while domestic oil and gas production in the US was high after the shale revolution, these shale oil prices were more sensitive, so it would not be cost-effective to go up, and companies would have to scale back production plans. It’s not just the economy that’s hurting. It’s also the politics of the opposition — there have been calls in Congress to question whether the Donald Trump administration is experimenting with ticket sales by dragging the country into unnecessary conflict.
Will Iran really close the Strait of Hormuz?
The answer is not so simple.
Historically, Iran has been shouting for decades, but never actually doing it. During the 1980s Iran–Iraq War, Iranian and Iraqi ships were attacked with missiles, shells and machine guns. Since the strait is not someone else’s road, Iran has to use it itself. Much of Iran’s oil exports and vital imports depend on this route. If the channel is really a letter, Iran first half hungry.
And today’s geography is different. Relations between neighbours such as Saudi Arabia and the United Arab Emirates, which were previously at loggerheads with Iran, are almost thawing. You Can’t just shake someone’s hand and then blow up their lifeline at sea. Who’s Gonna believe you? Tehran is not stupid and would not easily scuttle this diplomatic achievement.
But that does not mean Iran will never do it. The blockade of Strait of Hormuz is not a press release, it’s a real operation. Iran has talked tough, and it can.
In 2012, Iran threatened to close the strait in retaliation for US and European sanctions. In 2019, the threat was used to counter us“Maximum pressure”. I said I did, but I didn’t. But this time was different — not the military yelling, not the president threatening, but the Senate backing the blockade. This is not a bluff, but policy preparation.
Militarily, Iran can do it. It has missile positions off the coast of Strait of Hormuz, covering the entire gulf, including US bases in Qatar, the United Arab Emirates and Bahrain. Iran also has a large number of mines, navy operational experience, mature mine laying technology. If you really want to do, do not need to fight much, as long as the bombing of a ship or two, sealing a small section of the route, the whole sea channel will be chaotic.
And Don’t forget cyber warfare. Iran has the ability to launch a cyber attack on shipping systems that can turn, redirect and stop passing ships without the need for a bomb, as effectively as a live bullet.
The question now is not whether Iran will do so, but how far the US will push it. Tehran can not be ruled out playing the Strait of Hormuz card if it continues to attack Iranian installations on its own soil. Not because Iran has suddenly become stronger, but because it has been pushed to the point of no return. Everyone knows this is a mutually assured destruction threat. That is, if you try to step on the Red Line over and over again, there will always be a time when the other party does not flash.
To put it bluntly, Iran is using this card not to win, but to set prices. If the US does not understand this signal and still regards it as the old-fashioned“Bidding war”, then this game will probably not be a battle of words, but a real confrontation.
On June 22nd a department of the Royal Navy said it had observed“Electronic interference in the Strait of Hormuz”. At least two supertankers are reported to have turned around as they entered the Strait of Hormuz.
America has now opened Pandora’s Box, but when something does go wrong, it looks to others to clean up the mess.
After the June 22 air strike on Iran, American domestic pressure quickly rebounded, and secretary of State Rubio simply Fox News Channel the Chinese, saying that 40 percent of China’s oil is dependent on the Strait of Hormuz, china’s“Most relevant interests”, let China hurry to persuade Iran do not mess around, take the initiative to prevent the“Escalation of the situation.
In the end, this is not diplomacy, it is blatant blame. He started first, back to let China to put out the fire, to put it mildly is the hope of cooperation, to put it bluntly is to throw a pot and touch porcelain. The Chinese Foreign Ministry’s response was clear: calm, brief and uncooperative.
By this time, Chinese tankers docked in Bandar Abbas had begun unloading. The oil was being transported overland through China and Iran, not through Strait of Hormuz. Whether the strait is sealed or not will not affect the shipment.
The US operation was typical: the strategic tempo got out of hand, the words got harder and harder, and the action got softer and softer. Aircraft carriers come, missiles go, oil prices go up, but there is no solution, no solution. It had to end up shouting at China. This rhythm, said to maintain order, is actually creating chaos, and then let others to clean up.
This is America’s awkward reality: it can not stop fighting. Shout out the slogan, not the responsibility. It is time for the United States to wake up and decide whether it has the strength to pick up the pieces before launching a military strike.
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