The Strait of Hormuz

What it is

The Strait of Hormuz is a channel roughly 33 kilometers wide at its narrowest point, lying between Iran's southern coastline and Oman's Musandam Peninsula. It connects the Persian Gulf to the Gulf of Oman and the Arabian Sea, and carries more oil than any other sea passage. In 2024, petroleum liquids transiting the strait averaged 20 million barrels per day (b/d), about 20% of global consumption; in the first half of 2025, flows had risen to 20.9 million b/d. Qatar's liquefied natural gas exports add a further 11.4 billion cubic feet per day, more than one-fifth of global LNG trade.

The strait operates under a Traffic Separation Scheme (TSS) first adopted by the International Maritime Organization in 1968, with inbound and outbound lanes each roughly three kilometers wide. UNCLOS Part III (Articles 37-44) establishes the right of transit passage through internationally navigated straits; Article 44 explicitly bars bordering states from suspending that right, which is the legal provision Iran's closure threats directly contest.

History

Portuguese forces controlled Hormuz Island from 1515, marking the strait's role as a commercial chokepoint well before the oil era. The first modern crisis was the Iran-Iraq Tanker War (1980-1988), during which both sides attacked each other's tankers; the United States launched Operation Earnest Will in 1987 to convoy Kuwaiti vessels through the strait. Iran threatened closure again in 2011-2012 as Western sanctions tightened, and Iranian forces seized or harassed foreign tankers on multiple occasions between 2019 and 2023, targeting British, South Korean, and Greek vessels amid nuclear and sanctions disputes.

Current state

The June 2026 Iran-Israel conflict produced the most severe Hormuz disruption since the Tanker War. Iranian mines and IRGC attacks on commercial vessels prompted the IMO to launch an emergency evacuation plan on June 23, 2026; a subsequent attack on June 25 paused the operation, with 136 ships and roughly 2,900 seafarers evacuated. By early July, traffic had recovered to approximately 32-42% of pre-war normal levels, still far below baseline.

A 60-day ceasefire Memorandum of Understanding, dated from June 17, set a deadline near August 16 for a longer-term settlement. The Doha talks concluded July 2 with Qatar's assessment of positive progress and a new emergency communications channel, but no nuclear agreement and no resolution of Iran's core demand for joint coastal-state sovereignty and passage fees. The inaugural Iran-Oman Joint Hormuz Committee met in Muscat on June 29 under Article 5 of the Islamabad MoU, the first formal bilateral governance body for the strait. Iran's IRGC renewed closure threats within hours of the Doha outcome, publicly rejecting the US-proposed military hotline. The pace of reopening generated a paradoxical supply overhang, with Brent near US$67-68/bbl as stranded tankers cleared backlogs into a softening market, a dynamic that directly extended the Q2 2026 oil price collapse.

Relationships

Saudi Arabia contributed 38% of Hormuz crude flows in 2024 (5.5 million b/d). China, India, Japan, and South Korea collectively received 69% of all Hormuz crude that year. Qatar is the dominant LNG exporter through the strait. The UAE publicly rejected Iranian joint-control proposals, with ADNOC chief Sultan Al Jaber stating the strait must remain open unconditionally. Bypass pipelines can move approximately 4.7 million b/d around the strait via Saudi Arabia's East-West pipeline to Yanbu, the UAE's Abu Dhabi Crude Oil Pipeline to Fujairah, and Iran's Goreh-Jask line, covering roughly 23% of normal throughput.

What to watch

The 60-day MoU expires near August 16, compressing the nuclear and sovereignty negotiation into six weeks. IRGC posture during and after Iran's leadership transition, with Khamenei's state funeral running July 4-9, will indicate whether Tehran is genuinely de-escalating. Iran's demand for passage fees and a joint coastal-state control regime is the unresolved fault line; the OPEC+ output trajectory will shape how much leverage a renewed closure would give Tehran against Asian importers whose economies depend most directly on the strait.