The escalation of the war in the Middle East, especially after the United States' attack on Iran, threatens to have, once again, energy and economic consequences. The Iranian Parliament has approved the closure of the Strait of Hormuz following the U.S. attack on three of its nuclear facilities, as reported by Reuters and Al Arabiyah citing Press TV, the regime's channel. For this measure to be implemented, approval from the country's highest security body is required.
Markets have already felt the impact of the initial exchange of bombings between Israel and Iran, with increases in oil prices. Now, there is an additional possibility: Iran closing the Strait of Hormuz, a key point through which 20% of the world's oil passes.
Shortly after Iran's announcement, U.S. Secretary of State, Marco Rubio, urged China to intervene to prevent the strait's closure. China would be one of the most affected countries, as a significant portion of the oil passing through Hormuz is destined for the Asian country. "They have a strong dependency on the Strait of Hormuz for their oil," Rubio pointed out on a Fox News program. In his view, the closure would be "another terrible mistake" and an "economic suicide" that would hit other economies more than the American one.
The strait, located between Oman and Iran, connects the Persian Gulf with the Gulf of Oman and the Arabian Sea. Its key feature is that it has both the width and depth for large oil tankers or LNG carriers to pass through, transporting crude oil, petroleum products, or natural gas.
According to the EIA (U.S. Energy Information Administration), an average of 20.1 million barrels of oil passed through the strait daily during the first quarter of 2025, close to 20% of global daily consumption. The figure is very similar to the previous year (20.3 million on average), although there was a noticeable drop compared to previous years (21.4 million barrels in both 2022 and 2023, a 5% decrease).
"Large volumes of oil flow through the strait, and there are very few alternatives to transport the oil outside the strait if it closes," the organization warned in a recent report. In the same document, prior to the U.S. attack, the IEA noted that while traffic had not been affected by tension in the region, the price of Brent crude had risen in recent weeks. Bottlenecks, they explain, "are critical for global energy security." If oil cannot pass through "even temporarily," supply delays can increase transportation costs, potentially raising global energy prices.
In this case, the issue is not so much about avoiding the strait to reduce transit time - this was the issue, for example, with the Red Sea - but that the oil extracted in the region would be blocked from exiting. There is an alternative pipeline, but it cannot be transported by ship. Just a few days ago, as a result of the bombings, BBVA's research service cut its growth forecasts for Spain, precisely due to the potential impact on the economy of an increase in oil prices. According to their calculations, for every 10-point increase in oil prices, residual inflation rises by 1.1 points and general inflation by 0.2 points.
However, another key and hopeful factor is where the oil passing through the Strait of Hormuz comes from and where it goes. That is, although the closure would affect 20% of the global oil trade, the direct and immediate consequences would be felt by specific markets. The United States and Europe are not among them.
Out of the 20.1 million barrels per day that passed through the strait in the first quarter, only 0.4 million (1.9%) were destined for the United States. Europe as a whole is slightly above, 0.5 million (3.4%), but far behind other economies like China (5.4 million, almost 27%), India (2.1 million), South Korea (1.7 million), or Japan (1.6 million). China, in addition, has significantly increased the amount of oil it receives after passing through this channel: the 5.4 million on average at the beginning of 2025 represent a 12.5% increase over the 2024 average (4.8 million), the highest figure in the last five years. Both Europe (200,000 barrels less) and the United States (100,000) have reduced their dependence on the strait.
The move, however, would significantly impact the countries that use the strait to trade their oil, although, again, this excludes the United States and Europe. The most affected would be Saudi Arabia, which sends 5.3 million barrels daily, nearly half of its production (6.2 million barrels passed through the strait in 2023). Iraq (3.2 million), United Arab Emirates (1.8 million), Kuwait (1.4 million), and Iran itself (1.5 million) would also feel the impact.
Nevertheless, this does not mean that the global market would not feel the effects of a strait closure, especially if prolonged. Despite the fact that the United States hardly relies on Hormuz, the country remains the world's largest consumer of this product, with a daily appetite of 20.2 million barrels - nearly 20% of the global total - in 2023, the latest data published by the EIA. A supply reduction or increased waiting times would strain the market and drive up prices, even at a time when the barrel is below $80 and far from the peaks of 2022, precisely due to the ample oil supply. Moreover, in recent weeks, prices have surged from the annual minimum ($60.23) in early May to $75.48 on June 20, when Iran had already launched the attack but the U.S. response had not yet occurred. Thus, it is expected that a new escalation will impact oil prices, especially if Iran targets oil infrastructure.
The Middle Eastern markets, operating on Sunday, reacted tepidly to the attack, suggesting they do not anticipate a strong economic impact, as reported by Reuters. However, an SEB analysis estimates that Brent crude could rise between three and five dollars. Nevertheless, volatility and uncertainty are expected in the initial days.
Ships carrying liquefied natural gas (LNG) also pass through the strait, with one-fifth of the LNG transiting through it in 2023. Additionally, the closure would come at a time when European gas reserves are at 55.4%, according to AGSI. Spain, with its tanks at 73.45%, does not overly depend on the LNG passing through this strait, as it mainly imports it from the United States (34% of the total so far this year, according to Enagás' statistical bulletin), Algeria (mostly through pipelines, 20.6%), Russia (14.2%), and Nigeria (7.6%). Therefore, its supply routes would not be affected by a hypothetical closure of Hormuz.
On the other hand, although that 55% gas reserve may not be ideal, it is a much higher percentage than, for example, the week immediately following the Russian invasion of Ukraine. At that time, the EU average was 29% (Spain was at 58%), and countries like Germany were even lower (28%; now at 47%). In the equivalent week of June 2022, already in full gas stockpiling, the percentages were similar both at the community level (55.12%) and nationally (71.02%). Germany, highly dependent on Russia and with the Nord Stream tap cut off, was preparing for winter and was at 58.13%.