14.06.2025 08:40
Iran announced that it has closed the Strait of Hormuz to ship traffic following Israel's ballistic missile strike on its capital, Tel Aviv. The statement included the phrase, "No ships are allowed to pass through the Strait of Hormuz until further notice." The Strait of Hormuz is considered the heart of global oil and LNG transportation, and its closure is seen as the biggest nightmare for the markets.
Israel launched large-scale attacks on June 13, targeting the military's top command, including nuclear facilities in various cities of Iran. While the Chief of Staff of the Iranian Armed Forces, the Commander of the Revolutionary Guards, and several senior commanders, along with 9 nuclear scientists, were killed in the attacks, the total civilian casualties were reported to be 78. In the Iranian military's retaliation against Israel with ballistic missiles, preliminary reports indicate that 3 people were killed and 91 were injured.
The Islamic Republic of Iran's Army, which struck the city of Tel Aviv with ballistic missiles, announced through its official social media account that it has closed the Strait of Hormuz until further notice. The statement included the phrase, 'No ships are allowed to pass through the Strait of Hormuz until further notice.'
OIL PRICES MAY RISE EVEN FURTHER
With this move by Iran, it is expected that the oil prices, which have already increased by 7% following the mutual attacks between Israel and Iran, will rise further.
The Strait of Hormuz, a narrow waterway at the mouth of the Persian Gulf, connects Middle Eastern oil and LNG production to global markets via the Oman Sea and the Indian Ocean.
THE STRAIT OF HORMUZ IS CRITICAL
The Strait of Hormuz stands out as a critical maritime route that accounts for about one-third of global oil trade. Daily 17-20 million barrels of crude oil and condensate provided by Middle Eastern oil producers are shipped to global markets through the Strait of Hormuz.
According to data from the International Energy Agency, approximately 70% of the oil volume reaches Asia via this route. Notably, China, Japan, India, South Korea, Singapore, Thailand, Pakistan, and the Philippines are among the main buyers of oil supply from the Strait of Hormuz.
Almost all LNG ships from Qatar and the United Arab Emirates also reach international markets from this point, which accounts for 20% of global LNG trade. Europe is among the main buyers of LNG supply from the Strait of Hormuz.
The Strait of Hormuz, which is crucial for global oil and LNG trade, has once again become the focal point of the markets following Israel's attacks on Iran. Iran had previously stated that it could close the Strait of Hormuz during earlier tensions, but such a situation has not yet occurred.
However, the possibility of a broader conflict following Israel's recent attacks on Iran is raising concerns that the Strait of Hormuz could be closed. Concerns about potential disruptions in oil and LNG supply are supporting upward pressure on oil and natural gas prices.
CLOSURE OF THE STRAIT IS THE BIGGEST NIGHTMARE FOR THE OIL MARKET
The UK Maritime Trade Organization (UKMTO) warned on Wednesday that the increasing tensions in the Middle East could escalate military activities in critical waterways and negatively affect maritime transportation.
Experts from the Baltic and International Maritime Council (BIMCO) also reported that any potential attack could escalate tensions and directly impact maritime transportation.
On the other hand, some analysts believe that Iran has strong economic reasons not to close the Strait of Hormuz. Almost all of the country's oil exports must pass through this strait, and a significant portion of China's oil imports, which is an important trading partner for Iran, is also supplied through the Strait of Hormuz.
Arne Lohmann Rasmussen, Head of Global Risk Management Research, stated in a post on his LinkedIn account that the closure of the Strait of Hormuz would be "the biggest nightmare" for the oil market.
Rasmussen noted that if Iran were to close this narrow passage, 20% of global oil flow could be affected, warning that oil prices could rise to $100 in the event of a closure.
Oil prices surged by more than 7% during the day following Israel's attack on Iran, reaching $73.58 and hitting the highest level in nearly 5 months.