Can Iran Close Strait Of Hormuz After U.S. Attack On Its Nuclear Sites

Early on Sunday, the U.S. entered the cauldron of the Israel-Iran conflict with a bombing of Iran’s nuclear facilities in support of Israel. The move has again prompted calls within Iran for a retaliation involving a shut down of the Strait of Hormuz, a key maritime artery for oil and gas shipments from the Persian Gulf out to the Gulf of Oman and beyond (see map).

Overall, the U.S. dropped 14 “bunker buster” bombs against three nuclear facilities in Iran, namely Fordo, Natanz, and Isfahan, according to defense secretary Pete Hegseth. Iran has vowed retaliation, with its parliament approving a closing of the Strait of Hormuz, although the ultimate decision rests with the country’s military.

Oil prices, already up 20% since last month, are expected to trade higher over the coming days if the conflict escalates and there is disruption in the Strait of Hormuz. Cargo volumes lend relevance to constant market chatter about a retaliatory blockade of the Strait by Iran.

Saudi Arabia, Kuwait, Iraq, Iran and to an extent United Arab Emirates’ crude roughly equating to 30% of the world’s traded oil, as well as oil products, liquefied natural gas cargoes (equal to 20% of the global LNG trade primarily from Qatar) and one-third of the world’s liquified petroleum gas shipments, pass through the Strait daily, according to Lloyds List.

That’s around 30 to 33 million barrels of oil equivalent per day. The figure includes 21 million barrels per day of crude oil and products or a fifth of the world’s supply. So, will the Iranians attempt to shut the Strait and can they? The answer is that while they certainly can for a short period, they probably won’t.

Why It May Not Happen And Won’t Last Even If It Does

For starters, doing so would invite a near immediate naval and air response from the U.S. with President Donald Trump unlikely to sit back and let it happen. It would leave Iran’s own coastline and all its ports vulnerable to a vastly superior American air and naval strike arsenal. Nearby Bahrain is home to the U.S. Navy’s Fifth Fleet.

Furthermore, the manoeuvre may not even get off the ground as at least four of the fleet’s combined task forces routinely patrol the Persian Gulf and the Strait and their surveillance may take away the element of surprise.

Secondly, the move itself would be self defeating for Iran as it would impact the country’s own crude oil exports. According to industry data aggregator and research firm Kpler, Iran exports on average 1.65 million bpd of crude oil and gas condensate.

Bulk (or 90%) of Iran’s sanction-ridden discounted energy exports go to China. Furthermore, more than half of all energy exports passing through the Strait – whether Iranian or not – also head to China, the world’s largest importer of hydrocarbons. A potential naval shutdown would be very difficult to maintain under pressure from Beijing, the world’s main taker of Iranian crude.

Thirdly, such an event, however temporary, has partially lost its potency given that not all regional crude exports would be knocked offline. Key exporters Saudi Arabia and the UAE have pipeline fall backs to pivot to.

In the case of the Saudis, 5.1 million bpd can potentially be moved via the East-West pipeline and loaded up from the Red Sea. Although, that is currently susceptible to attacks by Iran-backed Houthi rebel forces in Yemen.

The UAE is much better placed. Its Abu Dhabi to Fujairah pipeline – that went onstream in 2012 – has a capacity of 1.5 million bpd. Its end point – the port of Fujairah – is the only one of the seven emirates that make up the UAE with a coastline that’s solely on the Gulf of Oman and not on the Persian Gulf that the Iranians are so fond of threatening to cut off. The port, which bypasses the Strait, has the capability to dispatch close to 75% of the UAE’s total crude output if needed.

However, minor skirmishes and general nuisance in the Strait by Iran’s Islamic Revolutionary Guard Corps or Pasdaran cannot be ruled out, including, but not limited to attacks on energy cargoes that aren’t for instance destined for Iran’s primary client – China.

There is also the potential random hijacking of energy cargoes in the Strait, which has precedent. But overall, a full blockade would be hard to set in motion and ever harder to maintain for long.

All things considered, Iran has been threatening to shut the Strait of Hormuz for years but has never actually ever attempted to do it or done it. While the region now finds itself in uncharted waters and there’s always a first, that fact in itself is quite telling.