TL;DR

Revolutionary Guard closes the strait

Iran's Islamic Revolutionary Guard Corps (IRGC) announced on Friday that the Strait of Hormuz is closed to shipping until further notice, according to Iranian state media. The announcement has not yet been confirmed by independent international sources, and no reason for the new closure has been given in the available reports.

The strait is a narrow passage between Iran and Oman and is the only maritime exit from the Persian Gulf. It is one of the world's most strategically sensitive chokepoints for global energy supply.

A chokepoint without equal

In the first half of 2025, an average of 20.9 million barrels of oil, condensate, and petroleum products passed through the Strait of Hormuz per day, according to energy market analysis data. That equates to roughly 20 percent of total global petroleum consumption and a quarter of all maritime oil trade worldwide.

Saudi Arabia alone accounted for 38 percent of crude oil and condensate exports through the strait in 2024. Around 84 percent of the cargo is destined for Asian markets — particularly China, India, Japan, and South Korea.

A closure of the Strait of Hormuz is not merely a regional problem — it is a shock to the very backbone of global energy supply.

What happened the last time the strait was closed

When the strait was effectively blocked from February 28, 2026, during the conflict between Iran and Western forces, the world felt the consequences quickly. According to available market data:

  • Brent crude broke through $100 per barrel as early as March 8 and peaked at $126
  • Physical crude oil prices approached $150 per barrel for brief periods
  • The IEA described the situation as "the greatest global energy security crisis in history"
  • Over 95 percent of tanker traffic was redirected
  • The International Maritime Organization (IMO) reported that around 20,000 seafarers and 2,000 ships were stranded in the Persian Gulf in April 2026

When fresh tensions flared in July 2026 following a temporary ceasefire, Brent jumped nearly 6 percent in a single day to above $80 per barrel, even after a period of calmer trading.

20.9 million bbl/day
Daily oil throughput at Hormuz
$126 USD
Brent peak during previous closure

Alternative routes fall short

Pipelines exist that can bypass the Strait of Hormuz, but their combined capacity falls well short of what is needed:

  • Saudi Arabia's Petroline (east–west): up to 7 million barrels per day to the Red Sea

  • UAE's Habshan–Fujairah pipeline: capacity of 1.5–1.8 million barrels per day to the Gulf of Oman
  • Iraq–Turkey pipeline (Kirkuk–Ceyhan): exports to the Mediterranean via Turkey

Together, known pipeline alternatives cover an estimated 8–10 million barrels per day. That is well under half of normal throughput through the strait itself. Countries such as Iraq, Kuwait, Qatar, and Bahrain largely lack alternative export infrastructure and are almost entirely dependent on free passage.

Shipping costs and insurance premiums skyrocketed

During the previous closure, war risk premiums for shipping insurance in Hormuz rose from 0.125 percent to between 0.2 and 0.4 percent of a vessel's insured value per transit. For large crude carriers (VLCCs), that translated to an additional cost of around $250,000 per voyage.

Spot rates for VLCC tankers on the Middle East–China route surged to between $296,000 and $469,000 per day, compared with $40,000–$60,000 in normal times. Shipping companies that chose to sail around the Cape of Good Hope rather than transit Hormuz had to account for 10–15 extra days to Europe and 5–8 extra days to East Asia.

Broader consequences for the global economy

Higher oil prices quickly feed through into increased freight and fuel costs, contributing to broader inflation. The World Bank has estimated that a 50 percent rise in oil prices could increase the global oil import bill by $20 billion per year, and cost some economies more than 5 percent of GDP.

For GCC countries (Gulf Cooperation Council), another dimension emerged during the previous crisis: over 80 percent of their food imports pass through the Strait of Hormuz. When the strait was closed, this rapidly became a consumer goods supply crisis, with price increases of 40–120 percent on everyday items.

For Norwegian players, the oil price is the most immediate connection. The Oslo Stock Exchange and Norwegian oil equities will be closely watched in the days ahead as markets assess the seriousness of the new IRGC announcement.

"Tanker traffic through the Strait of Hormuz has effectively ground to a halt — that tells you more about risk perception right now than almost anything else" – Jorge León, Rystad Energy

Source: Investing.com / Iranian state media. Figures and historical data based on the IEA, IMO, Rystad Energy, and the World Bank. The closure has not yet been confirmed by independent Western sources.