Tensions in Strait of Hormuz Affect Global Oil Prices

Feb 23, 2026

59 min

Feb 23, 2026 12:30

Strait of Hormuz tensions: Impact on global oil prices amid Iran-US standoff

## Key Oil Chokepoint

The Strait of Hormuz, a crucial passage for global oil, is under renewed scrutiny due to escalating tensions between Iran and the United States. This narrow waterway, which connects the Gulf to the Arabian Sea, is vital for transporting oil and liquefied natural gas (LNG).

## Strategic Importance

Handling about 20% of the world's oil, the strait is a critical route for Gulf crude and LNG exports. In 2024, approximately 20 million barrels of oil per day passed through, highlighting its significance in global energy markets.

## Regional Impact

Most shipments through the strait head to Asia, with China, India, Japan, and South Korea receiving the majority. Any disruption could severely impact these economies, given their reliance on oil and gas from this region.

## Military Tensions

The strait's narrowest point falls within Iran and Oman's territorial waters, giving Iran strategic leverage. Recent military drills by Iran and increased US naval presence have heightened concerns about potential disruptions.

## Economic Consequences

A closure of the strait could lead to significant oil price hikes, potentially exceeding $100 per barrel. This would have widespread economic repercussions, increasing inflation and affecting global trade and growth.

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