Iran Closes Strait of Hormuz, Creating Worst Energy Crisis Since 1970s

Iran's Revolutionary Guard has officially declared the Strait of Hormuz closed to all shipping, creating the most severe global energy crisis since the 1970s oil embargo. Dozens of laden oil tankers are now stranded in the Persian Gulf, while Iran's Islamic Revolutionary Guard Corps has issued warnings prohibiting vessel passage through the strait, leading to an effective halt in shipping traffic with tanker movement dropping to nearly zero.

The unprecedented closure comes as part of Iran's retaliation against coordinated US-Israeli airstrikes that began February 28, 2026, targeting military facilities, nuclear sites, and leadership, resulting in the death of Supreme Leader Ali Khamenei. The death toll from ongoing US-Israeli attacks has now reached 1,045, as the conflict entered its fifth day with multiple locations across Iran being bombarded and Tehran carrying out retaliatory attacks across the region.

The strait's closure represents a catastrophic blow to global energy markets. Roughly 13 million barrels per day passed through the waterway in 2025, representing about 31% of all seaborne crude flows, while about 20% of global liquefied natural gas exports from the Persian Gulf are also at risk. "We're now facing what looks like the biggest energy crisis since the oil embargo in the 1970s," says Helima Croft of RBC Capital Markets.

Iran achieved the effective closure not through a naval blockade but with strategic drone strikes near the strait, causing insurers and shipping companies to declare the passage unsafe, creating what experts call an "insurance-driven shutdown". Global benchmark Brent crude has surged nearly 10% since the conflict began, with analysts predicting oil could cross $100 per barrel if the closure persists.

Countries across Asia face the most severe disruption. India confronts the largest combined exposure, with more than half of its LNG imports being Gulf-linked and about 60% of its oil imports coming from the Middle East, creating both physical and financial shocks. Pakistan has already requested Saudi Arabia to reroute oil supplies through the Red Sea port of Yanbu after the strait's closure disrupted shipping.