Iran Denies Plans to Close Strait of Hormuz Amid Rising Tensions [UPDATED]

According to the pro-Iranian Savrin News Agency, cited by Roi Kais, Iran has not issued any official statement from its Navy commander about closing the Strait of Hormuz, countering recent rumors. Despite this denial, the strategic waterway remains a flashpoint as tensions between Iran and Israel escalate, with past threats from Iranian lawmakers like Esmail Kosari and Behnam Saeedi suggesting closure as a potential retaliatory option against U.S. or Israeli actions.

What Would Happen If Iran Closes the Strait of Hormuz?

Closing the Strait of Hormuz, through which roughly 20-26% of global oil and 30% of liquefied natural gas (LNG) transits daily, would have profound economic, geopolitical, and environmental consequences. Economic Impacts

1. Oil Price Surge: A blockade could spike oil prices to $100-$150 per barrel or higher, as nearly a third of global seaborne oil (about 20 million barrels daily) passes through the Strait. This would eliminate expected oil surpluses, driving inflation in energy, transportation, and manufacturing sectors globally. Europe, reliant on Qatari LNG, and Asia (China, India, South Korea) would face severe energy shocks.
2. Global Trade Disruption: The Strait is a key route for container trade, with ports like Jebel Ali (UAE) serving as transshipment hubs. A closure would increase shipping costs, insurance premiums, and delays, disrupting supply chains for goods beyond energy.
3. Impact on Gulf Economies: Gulf states like Saudi Arabia, UAE, Kuwait, Iraq, and Qatar rely on the Strait for oil exports. Alternative routes, like Saudi Arabia’s pipelines to the Red Sea, can handle only 7 million barrels daily, far below the Strait’s capacity. Economic strain could force these nations to support military intervention.
4. Iran’s Own Economic Hit: Iran exports oil primarily to China via the Strait, generating 65% of its government revenue. Closing it would cut off this lifeline, potentially destabilizing its economy and alienating China, which opposes disruptions to oil flows.

Geopolitical Consequences

1. Military Response: A closure would likely trigger a swift U.S.-led military response, involving the Fifth Fleet in Bahrain, to reopen the Strait. Allies like the UK, France, and Gulf states could join, risking a broader regional war. Past U.S. statements, such as from Defense Secretary Leon Panetta in 2012, underline this as a “red line.” Iran’s Supreme Leader, Ali Khamenei, has warned of “irreparable damage” to the U.S., suggesting escalation could spiral.
2. Global Powers’ Reactions: Major oil importers (China, Japan, India, Europe) would pressure for action to restore flows. China, despite buying most of Iran’s oil, would likely oppose a closure to avoid price spikes and supply cuts. Russia and China might diplomatically support Iran to counter U.S. influence, complicating UN Security Council responses.
3. Israel’s Position: Ironically, Israel would face no direct energy impact, as its oil imports (220,000 barrels daily) come via the Mediterranean from Azerbaijan, the U.S., and others. However, a closure could align Gulf states with Israel against Iran, strengthening regional alliances but intensifying conflict.

Environmental Risks

1. Oil Spills and Contamination: Iran could use mines, missiles, or drones to attack tankers, risking oil spills that could contaminate Gulf waters. This would threaten desalination plants critical to Gulf states like Qatar, Bahrain, and the UAE, which rely on them for 80-100% of drinking water. Such an environmental disaster could disrupt water and food security.
2. Long-Term Ecological Damage: The Gulf’s shallow waters and limited circulation make it vulnerable to long-lasting ecological harm from oil spills, affecting marine life and coastal economies.

Iran’s Capabilities and Limitations

Iran has the means to disrupt the Strait, including:

• Naval Mines: Cheap and effective in shallow waters, mines could deter shipping by raising insurance costs.
• Missiles and Drones: Iran’s arsenal of anti-ship missiles and Shahed drones could target tankers or infrastructure.
• Speedboat Swarms: The Islamic Revolutionary Guard Corps (IRGC) specializes in fast-boat attacks to harass or board ships.
• Electronic Interference: Recent reports note increased navigational disruptions near Iran’s Port of Bandar Abbas, impacting commercial ships.

However, a full closure is challenging:

• Military Pushback: U.S. and allied naval forces, including minesweepers and air assets, could counter Iran’s efforts, though not without cost.
• Economic Self-Harm: Iran’s reliance on the Strait for its own exports makes a prolonged closure “suicidal,” as described by Iran expert Meir Litvak
• .Oman’s Role: Much of the Strait lies in Omani waters, limiting Iran’s control. Alternative routes via UAE and Omani waters could mitigate some disruptions.

Iran has never fully closed the Strait, even during the 1980s Iran-Iraq War’s “Tanker War,” when it attacked 239 oil tankers but only caused temporary disruptions. Threats to close the Strait, as in 2012 against sanctions, have historically been bargaining tools rather than actions.

Why Iran Might Avoid Closure

Analysts argue Iran is unlikely to close the Strait unless its regime faces existential collapse or its oil infrastructure is directly targeted. Closing it would:

• Alienate China, its key oil buyer.
• Invite devastating military retaliation.
• Harm its own economy more than its enemies’.
• Noam Raydan from the Washington Institute noted Iran might opt for ship seizures, as in April 2024, rather than a full blockade.

While Iran’s denial of plans to close the Strait of Hormuz eases immediate concerns, the threat persists as a geopolitical lever. A closure would send oil prices soaring, disrupt global trade, and likely provoke a U.S.-led military response, risking a wider war. Environmental damage could cripple Gulf states’ water supplies. However, Iran’s economic dependence on the Strait and the likelihood of international backlash make a full closure a high-risk, low-reward move, reserved as a last resort. For now, the Strait remains open, but its vulnerability keeps markets and policymakers on edge.

UPDATE: Lawmakers in the Iranian Parliament reportedly just approved the closure of the Strait of Hormuz. A final decision now awaits approval from a senior security body.