What is Strait of Hormuz?

Only about 3 million barrels per day of crude are transiting the Strait of Hormuz during the crisis, down from 20 million barrels per day before the war.

“Three million barrels a day compared to 20 million barrels a day before the war is a big difference.”

Despite four months of Strait of Hormuz closure and roughly 1 billion barrels of crude removed from the market, oil prices have remained below 100 dollars per barrel, defying typical supply-shock expectations.

“We're four month you went into the fourth month of this the straight of horm's being closed And yet prices are below $100.”

Javier Blas on the Hormuz crisis being the biggest ever oil shock that did not trigger a full energy crisis.

“This is perhaps the first time that we have the biggest ever oil shock that doesn't really trigger a full-blown energy crisis.”

Jon Finer on Iran's new strategic leverage over the Strait of Hormuz.

“They now have done a real-world test case of this, know exactly how to do it. And anytime they feel hard done by the Trump administration, some future American administration, some other country, they now know they have this card that they can play going forward.”

Roughly 1 billion barrels of crude supply has been removed from the global market since the Strait of Hormuz closure.

“It's a billion barrels of supply that has been taken out of the market on the crude side of the picture.”

Matt Smith on the resilience of oil prices despite the Strait of Hormuz closure.

“We're four month you went into the fourth month of this the straight of horm's being closed And yet prices are below $100.”

Helen Thompson on how the Strait of Hormuz was effectively closed by insurers, not Iran.

“What we're seeing now, I think, is not so much that Iran closed the Strait of Hormuz, but in the first instance, that the shipping insurance companies did.”

Even if a Hormuz deal is reached, consumers will not see quick fuel price relief because crude oil prices can drop rapidly but refined product prices cannot, due to refinery bottlenecks and the lag in rebuilding capacity.

“If a deal happens, we are going to see a rapid drop in oil prices and we are not going to see a rapid drop in refined products.”

Cheap drones and short-range missiles let a militarily limited actor hold a narrow waterway like the Strait of Hormuz at risk because commercial shippers will not accept that exposure, and the US has no easy counter.

“With a relatively limited amount of military capacity, you can hold a tight waterway like that at risk and shippers are not going to take huge risks on their backs to go through less maybe they get hit by an explosive drone or a missile or something. And it's not easy for the United States to wipe that out.”

The Strait of Hormuz has been effectively globalized: Iran's leverage to open or close it can now be exercised far beyond the strait itself, making it a diffuse geopolitical instrument rather than a single chokepoint.

“It's kind of been globalized the Straits of Hormuz because the ability to open and close it and the ways in which the Iranians can open and close it can really happen anywhere now and not just in the Straits or Hormuz.”