- Oil markets are watching the Strait of Hormuz amid fears a potential U.S. response to Iran.
- A full closure could spike prices between $10 to $20 per barrel.
- Analysts see low probability of a full closure, citing U.S. naval presence and Iran’s limited capability.
The Strait of Hormuz is once again back in focus as a possible U.S. intervention in Iran raises the risk of Tehran disrupting one of the world’s most critical energy chokepoints.
U.S. President Donald Trump is considering a range of options against Iran, according to multiple media reports on Sunday, as it cracks down on domestic protests.
Industry experts cautioned that a military confrontation could provoke Iran to choke off the Strait of Hormuz, a narrow waterway that that connects the Persian Gulf and the Arabian Sea and through which nearly a third of the world’s seaborne crude flows.
“A disruption through the Strait of Hormuz could cause a global oil and gas crisis” especially when considering the “desperate and ill advised lengths the current Iranian regime may go to” should they find themselves increasingly backed into a corner with their power and lives at stake, said Saul Kavonic, head of energy research at MST Marquee.
About 13 million barrels per day of crude oil transited the Strait of Hormuz in 2025, accounting for roughly 31% of global seaborne crude flows, data provided by market intelligence firm Kpler showed. The risk of the waterway being blocked had also surfaced during the flare-up between Washington and Tehran in June last year.
As Iran’s production and exports are far larger than Venezuela’s, the global market would inevitably feel stronger ripple effects, said Muyu Xu, senior crude analyst at Kpler, adding that Chinese refiners could be forced to seek alternatives.
Unlike Venezuela, any military action involving Iran carries “materially higher risks” given the volume of crude and refined product supply and transit exposure, said Bob McNally, president of Rapidan Energy Group, who sees a 70% likelihood of selective U.S. strikes on Iran.
In an extreme escalation scenario, where tankers are unable to pass or energy infrastructure is damaged, oil prices could surge by double digits, said analysts.
“The fear of a closure will cause the price of oil to rise a few dollars per barrel, but it is the complete closure of the Strait that can result in a $10 to $20 per barrel spike,” said Andy Lipow, president of Lipow Oil Associates.
Kavonic sees an “immediate oil price spike” in the wake of any U.S. attack on Iran, but that will soften on any sign of the disruption being temporary.
Global benchmark Brent last hovered around $63 a barrel, while U.S. West Texas Intermediate futures held at $59 per barrel.
Most analysts stress that any catastrophic outcomes still remain low-probability events.
While Iran can always threaten to close the Strait of Hormuz, they may not want to do so given the complexity of power dynamics in the region and may not have the capability to fully close it given how the U.S. Navy is patrolling the area, said Kpler’s Xu.
Even in a scenario where Iran attempts a temporary disruption, such as harassing tankers or briefly blocking transit, the physical impact on supply would be limited.
Kpler estimates the oil market is currently tilting toward oversupply, with roughly 2.5 million barrels per day of excess supply in January and over 3 million barrels per day in February and March.
Additionally, any closure will likely be met with a show of force by the U.S. and allies to restore flows again, Kavonic said.
Still, experts cautioned against drawing direct parallels between Iran and Venezuela, where the Trump administration used sanctions, seizures to exert pressure on the Venezuelan regime, before capturing President Nicolás Maduro.
It would be very difficult for the U.S. to adopt a strategy toward Iran similar to Venezuela, because Iran is far from U.S. soil and the geopolitical situation in the Middle East is a lot more complex than in Latin America, Xu said. “Plus, Trump’s priority right now appears to be consolidating U.S. power in the Western Hemisphere.”
Lipow echoed that view, saying a Venezuela-style playbook in Iran is more likely to involve sanctions and enforcement rather than military occupation or attacks on infrastructure.
