The Strait of Hormuz’s closure and the resulting surge in global oil prices have handed financial windfalls to Iran, Oman and Saudi Arabia, while other states that lack alternative shipment routes have lost billions of dollars, a Reuters analysis found.
Iran effectively shut the Strait – a route for about a fifth of global oil and LNG flows – after U.S. and Israeli airstrikes on Iran at the end of February led to a widening conflict.
It later said it would allow transits by vessels that had no U.S. or Israeli links. As a result, some tankers have managed to cross the narrow waterway, but energy markets have still experienced unprecedented disruption. International Brent crude rose by 60% in March, a record monthly increase.
U.S. President Donald Trump has threatened to rain “hell” on Tehran unless it makes a deal by the end of Tuesday that would allow traffic to start moving through the Strait of Hormuz.
While much of the world faces a surge in inflation and economic damage from the energy price rise, for the Middle Eastern oil producers, the impact has depended on their geography.
Although Iran has control over the Strait, Oman, Saudi Arabia and the United Arab Emirates can bypass it via pipelines and ports.
By contrast, oil from Iraq, Kuwait and Qatar has been trapped as the countries lack alternative routes to international markets.
Following Trump’s latest threat, an Iranian official told Reuters Iran would not open the Strait as part of a temporary ceasefire. It has rejected Trump’s previous ultimatums, saying it will not be humiliated.
Some analysts say the U.S.-Israeli war on Iran in some ways has strengthened Tehran.
“Now that Hormuz has been closed, it can be closed again and again, and that poses a major threat to the global economy,” said Neil Quilliam, associate fellow at think tank Chatham House. “The genie is out of the bottle.”
The International Energy Agency described the conflict as the world’s biggest energy supply shock yet, citing more than 12 million barrels per day of regional shut-ins and damage to about 40 energy facilities.
