Iran Threatens Hormuz Passage, Risking 20% of Global Oil Supply

Iran escalated its rhetoric over the Strait of Hormuz, threatening a “strong and forceful response” to US naval activity and risking the passage of 20% of the world’s daily oil and gas supply through the critical chokepoint.

"If Iran were to succeed in obtaining the authority to apply additional tariffs to transits through the Strait, this could still lead to economic consequences and shifts in trade flows," Italian Prime Minister Giorgia Meloni said to her nation's parliament, highlighting the broad economic risks.

The threat of a full or partial closure of the waterway raises the prospect of a sharp spike in crude oil prices and a broad sell-off in global equity markets, as investors brace for heightened inflation and transportation costs. The warnings followed the first passage of US Navy destroyers through the channel in months, which Iran’s IRGC Navy called a violation of a fragile, week-old ceasefire.

At stake is the stability of global energy markets, with about one-fifth of all seaborne oil supplies transiting the narrow waterway daily. Any prolonged disruption could severely strain supply chains and trigger significant economic uncertainty. The last major disruption in the strait in the 1980s during the Iran-Iraq War saw oil prices double, providing a stark historical precedent for the potential economic fallout.

The immediate trigger for the heightened tensions was former US President Donald Trump's announcement of a naval blockade designed to stop “any and all Ships trying to enter, or leave” the waterway. He stated the blockade would remain until Iran allows unobstructed passage for all oil shipments. In a direct rebuke, Iran’s Islamic Revolutionary Guard Corps Navy declared it has “full control” of the Strait, insisting it remains open for non-military vessels under its “smart control and management” but that military ships would face a "strong and forceful response."

The war of words followed concrete action. On Saturday, April 11, two American Navy destroyers transited the strait, the first such passage since the recent war began. According to a Foreign Ministry spokesperson speaking to the Khabar Network, Tehran sent an urgent message via Pakistani mediators, warning that if the lead US vessel continued its course, it would be “targeted within 30 minutes.” US officials later confirmed the passage and added that its forces had taken down an Iranian drone that approached the destroyers.

The escalating crisis has prompted a significant international response. Italy has formally joined a UK-led maritime security coalition that now includes more than 30 countries. The coalition's stated goal is to "build security conditions that allow for the full restoration of freedom of navigation and supply." Prime Minister Meloni emphasized the collaborative effort to stabilize the crucial passage. However, the coalition's operational capacity faces limits, as Italian Deputy Prime Minister Matteo Salvini stated that Italy would not unilaterally deploy naval vessels for patrols without explicit authorization from the United Nations.

Beyond direct military threats, Iran is accused of employing economic tactics to control the strait. These include proposals to charge fees for passage, which Rome warns could disrupt trade flows even without a formal closure. Furthermore, reports have surfaced that Iran claims to have lost track of mines it previously laid in the waterway, a move that has effectively scared off some commercial shipping operators and kept traffic below pre-war levels despite the ceasefire. This uncertainty acts as a de facto tax on shipping, raising insurance and security costs for any vessel attempting the passage. The potential for a sudden supply shock has put energy traders on high alert, with oil futures markets expected to price in a significant risk premium.

This article is for informational purposes only and does not constitute investment advice.