Iran-US Showdown Over the Strait of Hormuz, Global Economy Faces Impact - Where Does the Path to Breaking the "Blockade" Lead?

Affected by the military conflicts between the United States, Israel, and Iran, international oil and gas prices have recently surged, with significant increases in many European countries, adding to the cost of living pressures for Europeans. The picture shows customers refueling at a gas station in Aske New Town, northern France. Xinhua News Agency (Photo by Sebastian Kurzy)

Recently, as the fighting between the US, Israel, and Iran continues to escalate, the strategic international waterway—the Strait of Hormuz—has become a global focus. What is the current situation of traffic through the Strait of Hormuz? How is this affecting the global economy? And what are the possible ways to unblock the Strait?

Serious Disruption of Strait Shipping

According to the UK’s Daily Telegraph on March 16, no ships have transited the Strait of Hormuz since the 14th. This is the first time since the US and Israel launched military actions against Iran, whereas before the conflict, an average of 77 ships passed through daily.

Additionally, reports from Xinhua News Agency indicate that maritime data shows only 77 ships have passed through the Strait of Hormuz since March 1. In comparison, from March 1 to 11 last year, 1,229 ships transited the strait. The International Maritime Organization’s official website, based in London, shows that from the start of the US-Israel military actions against Iran until March 13, there have been 16 confirmed attacks on ships in the Strait of Hormuz and nearby waters.

On the day the US and Israel launched military strikes against Iran, February 28, Iran announced a ban on all ships passing through the Strait of Hormuz. Iran’s new Supreme Leader, Ayatollah Ali Khamenei, recently stated that Iran will continue to block the Strait.

However, Iranian Foreign Minister Hossein Amir-Abdollahian told US media that the Strait of Hormuz is actually open, only closed to “Iran’s enemies,” and that “many ships are choosing not to pass for safety reasons, but this has nothing to do with us.” He also said some countries have contacted Iran hoping their ships can pass safely through the Strait. Iran is willing to negotiate with these countries, but the final decision will be made by the Iranian military.

Faced with the de facto severe blockade of shipping through the Strait of Hormuz, the US is attempting to pressure Iran into submission through a combination of military strikes and threats. However, according to multiple informed sources, the Pentagon and the National Security Council have significantly underestimated Iran’s potential response, including the possibility of Iran sealing off the Strait of Hormuz.

On March 14, US President Donald Trump posted on social media that the US would launch a heavy bombing campaign along Iran’s coastlines, and that the Strait of Hormuz would be opened “very soon.” Previously, US forces bombed the Iranian oil export hub on Kharg Island in the northern Persian Gulf but did not destroy the island’s oil infrastructure. Trump threatened that if Iran or other countries interfere with the free and safe passage of ships through the Strait of Hormuz in any way, “I will reconsider this decision immediately.”

Global Economy Under Threat

The Strait of Hormuz connects the Persian Gulf and the Gulf of Oman, serving as a vital route for oil exports from several major Middle Eastern oil producers and a crucial artery for global energy security. Data shows that over a quarter of global seaborne oil and about one-fifth of liquefied natural gas are transported through the Strait of Hormuz to the world.

According to the International Energy Agency, since the outbreak of the US-Israel-Iran conflict, oil shipments passing through the Strait of Hormuz have sharply decreased to less than 10% of pre-conflict levels. Many oil-exporting countries have reduced production due to the lack of transportation channels.

Saudi Aramco’s President and CEO, Amin Nasser, recently warned that continued disruption of shipping through the Strait of Hormuz could lead to “catastrophic consequences” for the global oil market. Due to ongoing geopolitical tensions, international crude oil futures prices broke through the $100 per barrel mark again on the evening of March 15 as a new trading week began.

However, there are differing opinions on whether international oil prices will remain high or even trigger a repeat of the 1970s “oil crisis.”

Researcher Qian Xuming from the Middle East Studies Institute at Shanghai Foreign Studies University told this reporter that during the 1970s oil crisis, the US was highly dependent on foreign oil. Today, the US is not only the world’s largest oil producer but also has substantial strategic oil reserves, and coordinates well with OPEC countries. Therefore, once the conflict ends, international oil prices are likely to fluctuate around current levels.

A recent report from the United Nations Conference on Trade and Development states that escalating tensions in the Middle East disrupting transportation through the Strait of Hormuz have impacts far beyond the region, affecting not only energy markets but also maritime shipping and global supply chains.

For example, in agriculture, phosphate fertilizer production requires sulfur, which is a byproduct of petrochemical industries. Gulf countries produce about one-fifth of the world’s phosphate fertilizers and about one-quarter of sulfur. About one-third of global fertilizer exports rely on transportation through the Strait of Hormuz. Reports indicate that after the US and Israel attacked Iran, global fertilizer prices rose by one-third, and rising fertilizer costs and supply shortages will inevitably impact agricultural product prices. The UN warns that rising food and energy prices hit poor countries and low-income families hardest, potentially worsening global food security crises and social instability.

How to Unblock the Strait?

According to US media reports, regarding whether the US military will escort ships through the Strait of Hormuz, President Trump was vague in an interview on March 14, only saying “possibly.” In fact, US statements on escorting ships have been inconsistent. Trump has repeatedly claimed that US forces might escort oil tankers through the strait, but the US Navy has said “it cannot.” Multiple media outlets confirm that since the conflict began, nearly every commercial vessel near the strait has requested US naval escort, but all requests have been refused.

The US’s inconsistent stance on escorting ships largely stems from the enormous risks involved. The Strait of Hormuz is an arc-shaped waterway only about 33 kilometers at its narrowest point. The shallow waters near the coast are generally less than 25 meters deep, and the narrowness diminishes US military technological advantages, making collisions, misjudgments, and accidental strikes highly likely.

Iran, despite suffering significant military setbacks, still retains various coastal attack capabilities, including laying mines, deploying fast attack boats, drones, and missiles, thanks to its strategic geographic advantages.

Additionally, media reports say Trump recently proposed forming a “Hormuz Alliance” to control the strait. However, many countries, including US allies in the West, have not responded positively to this proposal.

Beyond the US’s “military opening” plan, regional countries like Saudi Arabia and the UAE are also trying to establish alternative oil transportation routes that bypass the Strait of Hormuz. Saudi Aramco recently confirmed that some of its crude exports have been rerouted to the port of Yanbu on the Red Sea coast.

However, this plan faces two major issues: first, the existing pipelines in the region are insufficient to handle all oil and gas output, and building new pipelines would take time and cannot meet immediate needs; second, even if transported to the Red Sea coast, safety remains uncertain. The Economist reports that although the US has previously targeted Houthi forces in Yemen for attacking Red Sea shipping, shipping through the Red Sea has not yet returned to pre-conflict levels.

“Shooting or rerouting—neither is a perfect solution. So, what is the right way to unblock the Strait of Hormuz?”

Chinese Foreign Ministry spokesperson Wang Wenbin said at a routine press conference on March 16 that recent tensions in the waters near the Strait of Hormuz are disrupting international cargo and energy trade routes, undermining regional and global peace and stability. China again calls on all parties to immediately cease military actions, avoid further escalation, and prevent regional turmoil from causing greater impacts on global economic development.