Iran Closes Strait of Hormuz After Israeli Strikes, Halting 20% of Global Oil Supply
Direct state-to-state warfare between Iran and Israel marks unprecedented escalation in Middle East conflict, with Tehran effectively shutting the world's most critical energy chokepoint in retaliation for US-Israeli attacks.
Iran has effectively closed the Strait of Hormuz—halting roughly 20% of global oil flows—following joint US-Israeli strikes that killed Supreme Leader Ali Khamenei and triggered retaliatory missile barrages across the Middle East. Tanker traffic through the waterway dropped approximately 70% before falling to near zero, with over 150 vessels anchoring outside the strait to avoid Iranian threats.
The strikes, launched 28 February 2026, targeted Iranian nuclear facilities, ballistic missile infrastructure, and senior leadership across multiple cities. Between 28 February and 4 March, Iran launched more than 90 strikes against Israel, with around 20 hitting civilian areas and killing at least 10 people. The shift from proxy engagement to direct state confrontation represents the most dangerous inflection point in Iran-Israel relations since the 1979 revolution.
Oil markets spike, then swing on reserve release speculation
Brent crude futures surged nearly 50% to $120 per barrel before falling back, still remaining roughly 17% higher than pre-strike levels. US benchmark WTI crude peaked above $116 per barrel shortly after midnight on Monday ET before dropping to just over $90 within 24 hours, compared to slightly over $91 when markets closed the previous Friday.
Prices fell sharply after the Wall Street Journal reported the International Energy Agency was considering the largest release of oil reserves in its history, with Brent hovering below $85 per barrel as of early Wednesday GMT. OPEC+ announced it would increase production by 206,000 barrels per day in April—higher than analysts expected—with Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria and Oman boosting output.
Rystad Energy analysts warned Brent could climb to $135 per barrel if current conditions persist for four months, with prices staying above $110 on a two-month basis. According to Visual Capitalist, AAA reported the US national average gas price jumped 60 cents (more than 20%) in two weeks, while Iran’s closure of the strait sent WTI crude to $119 per barrel—up from $57 at the start of 2025.
The nuclear-energy infrastructure nexus
Strikes hit ballistic missiles, mobile launchers, missile production infrastructure, nuclear facilities linked to enrichment at Natanz, and senior political figures including members of the Assembly of Experts meeting in Qom. The IDF Persian account reported striking multiple IRGC facilities in Tehran, including a missile production center in the Khojir area, facilities developing components for surface-to-surface and surface-to-air missiles, and a chemical factory producing missile fuel.
Israeli-US airstrikes targeted multiple fuel storage and distribution facilities in Iran, with the Israeli military confirming attacks on “a number of fuel storage facilities in Tehran” used by Iran’s military to operate infrastructure. According to Iranian officials, at least 1,255 people have been killed in Iran since 28 February when US-Israeli attacks began.
Four strikes on Iranian nuclear facilities during the current US-Israeli military campaign underscore both allies’ determination to eliminate Iran’s remaining pathways to nuclear weapons. Several nuclear facilities remain undamaged, including Arak, a highly secure plutonium complex, and Bushehr nuclear energy plant, though Israel struck a university associated with the nuclear program and at least twelve missile sites.
With Tehran targeting energy infrastructure, there is high risk Iran’s key export facilities at Kharg Island will be struck—the Strait of Hormuz is an irreplaceable chokepoint for nearly 15 million barrels per day of crude and condensate and over 4 mb/d of oil products.
Asia bears brunt of supply disruption
Asian countries collectively receive 89.2% of crude oil and condensate transiting the waterway, with China accounting for 37.7% of total flows—more than any other country—followed by India at 14.7%, South Korea at 12.0% and Japan at 10.9%. The United States receives just 2.5% of these flows, reflecting increased domestic production and diversified import sources.
Qatar is currently the world’s second largest LNG exporter, with total exports over 112 bcm in 2025, while the UAE exported 7 bcm—the total volume of LNG transiting the strait was just over 112 bcm in 2025, equating to almost 20% of global LNG trade. Europe gets 12% to 14% of its LNG from Qatar through the strait.
| Country | Share of Hormuz flows | Vulnerability |
|---|---|---|
| China | 37.7% | High – 1/3 of oil via strait |
| India | 14.7% | High – all oil imported |
| South Korea | 12.0% | High – critical energy dependency |
| Japan | 10.9% | High – 100% oil imports |
| United States | 2.5% | Low – diversified sources |
In 2024, an estimated 84% of crude oil and condensate shipments through the strait were destined for Asian markets, with China receiving a third of its oil via the strait and holding about a billion barrels in oil reserve—a few months of supply.
Military buildup sets stage for confrontation
On 13 February 2026, USS Gerald R. Ford was en route to the Middle East, creating an uncommon two-carrier deployment and the most significant US force posture in the region since the 2003 invasion of Iraq. On 24 February, twelve F-22 fighter jets were deployed to Ovda Airbase in southern Israel—the first US deployment of offensive weaponry in Israel.
The Israeli Air Force struck 500 military targets in western and central Iran using about 200 fighter jets in the largest combat sortie in its history, codenamed Operation Roaring Lion. US forces struck more than 5,000 targets in Iran since Saturday, US Central Command said on 10 March.
“The market is currently grappling with physical supply being choked off by drone strikes, while Middle Eastern producers are simultaneously hitting a critical point where they must shut in production simply because there is nowhere left to put the oil.”
— Janiv Shah, Vice President of Oil Markets, Rystad Energy
Iran launched strikes across nine countries in the region: Bahrain, Iraq, Jordan, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, with an Iranian drone also striking a runway at a UK military base in Cyprus. The US military confirmed 13 fatalities from Iranian attacks across the region.
Food security and fertilizer cascades
The UN World Food Programme and economic analysts warned the 2026 military escalation is driving significant, long-term increases in global food prices—a near-total halt of tanker traffic in the Strait of Hormuz has disrupted the supply of fuel and essential fertilizers, with The Fertilizer Institute stating nearly 50% of global urea and sulfur exports, plus 20% of global LNG (a key feedstock for nitrogen fertilizers) transit through the strait.
Disruptions in the Strait of Hormuz underscore the vulnerability of critical maritime chokepoints to geopolitical tensions and their potential to transmit shocks across supply chains and commodity markets, per UNCTAD—reducing risks requires de-escalation and safeguarding maritime transport, ports and seafarers while maintaining secure trade corridors in line with international law.
What to watch
Israeli retaliation timeline: Netanyahu stated the goal of strikes was to “remove the existential threat posed by the terrorist regime in Iran,” with Foreign Minister Gideon Sa’ar saying military action was urgently needed “despite the significant risks involved,” adding that “delay would have allowed the Iranian regime to reach a level of immunity for its nuclear programme.” The extent and targets of follow-on strikes will determine whether Iran escalates further or seeks diplomatic off-ramps.
Naval escort viability: On 9 March, French President Emmanuel Macron announced France and several states are setting up a “purely defensive” escort mission for merchant ships in the framework of Operation Aspides, with France sending a dozen ships—Britain, Germany and Italy are working to support commercial shipping through the Strait of Hormuz. Unlike US-led naval convoys during the 1980-1988 Iran-Iraq war, the United States is now a combatant—organizing armed escorts would require diverting US Navy destroyers from other missions, with US and allied forces remaining vulnerable to Iranian drones, short-range missiles, torpedoes, and sea mines in the strait’s narrow lanes.
Oil reserve drawdown capacity: According to the International Energy Agency, reserves held by the 38 OECD countries totaled around 2.83 billion barrels by end-October, covering roughly 61.8 days based on consumption. The strait handles roughly 20 million barrels daily—a complete stoppage could initially be mitigated by drawing on global reserves, but this would likely only provide relief for a few months before markets face increasing supply pressures and sharp price spikes.
Diplomatic intervention prospects: According to RAND analysts, historical diplomatic off-ramps appear nonexistent—both Israel and Iran believe they are fighting against existential threats, with Israel and the United States targeting Iran’s power projection capabilities (ballistic missiles, proxy networks, nuclear program) while Iran has expanded the conflict to increase costs for Gulf Arab nations and the global economic system. For diplomacy to work, all three countries must be willing to come to the table and trust adherence to any agreement—more than a week into the war, each appears uninterested in finding a diplomatic solution.