Key Highlights
- Iran's parliament approves potential Strait of Hormuz closure, risking ~20% of daily oil and LNG trade.
- Oil futures surge over 3‑6%, with Brent nearing $80‑$80.50 amid fears of supply disruption.
America has targeted Iran's nuclear facilities. Following this, the situation in the Middle East has become more volatile. Meanwhile, Iran has made a major announcement. Iran's parliament has approved a proposal to close the strategically important Strait of Hormuz.Other countries' oil prices will almost certainly rise as a result of this decision.
This is the same route that approximately one-third of the world's sea oil trade follows. Iran's state-run Press TV reported the decision on Sunday. Following this, there was a stir in global oil markets and strategic circles.
Importance of the Strait of Hormuz
The Gulf of Oman and the Persian Gulf are connected by the strait of Hormuz. It is also among the busiest and most delicate oil routes in the world. The bulk of oil exports from nations like Saudi Arabia, Kuwait, Iraq, the United Arab Emirates, and Qatar go via this route.
One of the most significant maritime routes in the world is the Hormuz Strait. At its narrowest point, this route is only 21 miles wide and roughly 96 miles long. There are only two-mile shipping lanes on both sides of this waterway, which Iran can close at any time. Following the decision to close it, crude oil prices are expected to skyrocket as a result of ship movement issues and increased transportation costs.
The final decision is of the Security Council
Major General Kovasari, a member of the National Security Committee of Iran's Parliament, told state media that "the Supreme National Security Council of Iran will make the final decision, but there is a consensus in favor of closing the Strait of Hormuz." As the nation's top security body, this council decides on final military and diplomatic matters.
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More than just a geographic move, closing the Strait of Hormuz might cause the US and the West to suffer a serious economic blow. The world economy, maritime trade, and oil supplies could all suffer as a result of this action. India and other nations that depend significantly on West Asian oil imports may also experience challenges.
