The Importance of the Strait of Hormuz in 2025: A Strategic Artery for Global Trade and Energy
The Strait of Hormuz is one of the world's most vital maritime passages, linking the Arabian Gulf to the Gulf of Oman and the Arabian Sea. It is the only sea outlet for several Gulf countries. In this post, we explore the strategic, economic, and political significance of the Strait of Hormuz, with a focus on its critical role in global energy security and international trade as of June 2025.
Why Is the Strait of Hormuz the Economic Lifeline of the World?
The Strait of Hormuz is a narrow waterway stretching around 167 km in length and between 39 and 96 km in width. It sees the daily passage of about 20–30 oil tankers carrying roughly 20.5 million barrels of oil—around one-fifth of global oil consumption. It is the main route for oil exports from countries like Saudi Arabia (88%), Iraq (98%), the UAE (99%), Iran, Kuwait, and Qatar, in addition to about 20% of the world’s liquefied natural gas (LNG), especially from Qatar—the largest LNG exporter globally.
The Role of the Strait of Hormuz in Global Oil Trade
Roughly 24% of global oil production passes through the Strait, making it vital to industrial nations such as Japan, India, South Korea, and China, which heavily depend on Gulf oil. For example, Japan is the largest importer of oil via the Strait of Hormuz. Any disruption in maritime traffic could lead to a global spike in oil prices, affecting international economies.
What Is the Strategic Importance of the Strait of Hormuz?
The Strait holds strategic importance due to its geographic location between Iran to the north and Oman to the south, with Oman overseeing traffic in the main shipping lane within its territorial waters. It is considered part of international waters under international law, allowing freedom of navigation provided that coastal states' security is not compromised. Nonetheless, the strait has witnessed repeated tensions due to political conflicts, especially between Iran and Western nations.
Political Tensions in the Strait of Hormuz – 2025
In April 2025, tensions escalated when Iran seized a commercial vessel linked to Israel, seen as a political message to the West and Israel. The deputy commander of Iran’s Revolutionary Guard warned in April 2025 that any provocation could prompt a strong response, noting Iran’s control over the strait, which carries 40% of the world’s oil. Such remarks raised fears of a potential blockade, which could lead to a global economic crisis.
How Has History Shaped the Importance of the Strait of Hormuz?
Since the 10th century, the Strait of Hormuz has been a key hub for trade between East and West, linking India and China with West Asia and North Africa. During the Middle Ages, the Kingdom of Hormuz was a major trading center, occupied by the Portuguese in 1515 before being reclaimed by British and Iranian forces in 1632. Today, the strait retains historical importance as a natural heritage site in Oman, with carvings dating back to the 3rd millennium BCE showing Sumerian use of the route.
Strategic Islands Around the Strait of Hormuz
The Strait encompasses several strategic islands such as Qeshm, Larak, and Hormuz (Iran), and Umm al-Ghanam and Musandam (Oman). The islands of Greater Tunb, Lesser Tunb, and Abu Musa remain disputed between Iran and the UAE, increasing regional sensitivity. These islands are used for maritime surveillance and strategic control.
What Are the Impacts of Closing the Strait of Hormuz?
Even a partial closure of the Strait could trigger a global energy crisis. A halt in oil shipments would affect countries like Europe, India, and China, driving up energy prices and disrupting supply chains. Iran itself would suffer economically, as it relies on the Strait to export oil to China. To avoid such a scenario, countries like Saudi Arabia have developed alternative pipelines, such as the Petroline to Yanbu on the Red Sea. However, these alternatives cannot fully compensate for the Strait’s role in transporting other goods.
Gulf Countries’ Efforts to Reduce Dependency on the Strait
Gulf states are working to reduce their reliance on the Strait of Hormuz by developing alternative infrastructure such as pipelines and new ports. Nevertheless, the Strait remains the most economically viable option for oil and goods transport due to its efficiency and lower costs compared to alternatives.
What Is the Future of the Strait of Hormuz Amid Regional Tensions?
As tensions persist between Iran and the West, the Strait of Hormuz continues to be a focal point in geopolitical and economic maneuvering. The United States, through its Fifth Fleet based in Bahrain, maintains a strong military presence to safeguard navigation. Meanwhile, Iran seeks to strengthen its influence over the Strait as a diplomatic leverage. The Strait is expected to remain a crucial element in global energy security, with ongoing international efforts to maintain its stability.
The International Community’s Role in Securing the Strait
In June 2019, the international community, led by the United States, called for a military coalition to protect navigation in the Strait and Bab al-Mandeb following attacks on oil tankers. The UK also deployed warships to defend freedom of navigation, reflecting major powers’ commitment to the Strait’s security.