A US naval blockade of the Strait of Hormuz has escalated tensions with Iran and raised fears of a prolonged global energy crisis, with analysts warning the disruption could rival or exceed previous oil shocks.
President Donald Trump ordered the blockade on Sunday, with the measure taking effect at 10 a.m. ET on Monday, according to the US Central Command. The action targets vessels entering or leaving Iranian ports and surrounding coastal waters, including routes through the Arabian Gulf and Gulf of Oman.
The move followed failed weekend negotiations between Washington and Tehran over Iran’s nuclear programme, regional security issues, and ongoing conflict dynamics involving Israel and Iran-backed groups.
Within hours of the announcement, tanker traffic through the Strait of Hormuz — already heavily disrupted by weeks of conflict — reportedly ground to a halt again, with some vessels turning back, according to maritime tracking data cited by Lloyd’s List Intelligence.
The strait is one of the world’s most critical energy chokepoints, traditionally carrying about one-fifth of global oil supplies. Even before the latest escalation, flows had already slowed sharply due to earlier military strikes in the region.
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Crude oil prices reacted immediately, with US West Texas Intermediate rising more than 8% to about $104 a barrel and Brent crude climbing over 7% to above $101, as markets priced in further supply constraints from the Persian Gulf.
Analysts warn that a sustained closure or blockade could trigger a far deeper supply shock, pushing oil prices significantly higher and intensifying global inflationary pressures.
“Taking more oil off the market — particularly the only oil that is now getting out from the Persian Gulf — will drive oil prices further up,” said Trita Parsi of the Quincy Institute for Responsible Statecraft, projecting possible spikes toward $150 per barrel in an extreme scenario.
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The disruption extends beyond crude oil. Economists say fertilizer, helium and other industrial inputs moving through the same shipping routes could face shortages, adding pressure on food production and semiconductor supply chains already under strain.
The International Monetary Fund and World Bank have signalled potential downgrades to global growth forecasts, warning that emerging markets would bear the brunt of the shock.
Barclays analysts said prolonged instability could continue to disrupt extraction, refining and export operations across Gulf producers, with knock-on effects for global supply chains.
The International Energy Agency described the situation as the most severe energy disruption in decades, with some analysts comparing its potential impact to or beyond the oil crises of the 1970s.
Despite these warnings, some economists note that the global economy is less vulnerable to oil shocks than in previous decades due to improved efficiency and diversified energy sources, including renewables and nuclear power. However, they caution that a prolonged blockade could still deliver a severe macroeconomic hit.
The geopolitical fallout is also widening.
China, the largest buyer of Iranian crude, is seen as particularly exposed if the blockade disrupts shipments through Hormuz. Analysts say any interruption could strain US-China relations further, especially as Washington weighs additional tariffs linked to Iran-related trade.
India, Pakistan and other Asian economies that rely heavily on Gulf energy imports are also considered vulnerable to supply disruptions and price spikes.
Beyond economic consequences, legal and security questions are mounting. Experts cited by market analysts argue that under international maritime law, no state has authority to close the Strait of Hormuz, one of the world’s key international shipping lanes.
Iran has warned that any military vessels entering the area could be treated as hostile, raising the risk of direct naval confrontation. The US has maintained that the blockade is aimed at enforcing security measures and restricting Iranian-linked maritime activity.
Some analysts suggest the move may be intended as a negotiating tactic rather than a permanent closure, designed to pressure Tehran back to talks. Others caution that miscalculation could quickly escalate into broader military conflict involving Gulf states and global naval forces.
Shipping companies have already become increasingly cautious, with insurers raising risk premiums and some vessels avoiding the strait altogether due to sanctions exposure and security concerns.
As tensions intensify, energy markets remain on edge, with traders watching closely for any sign of escalation or diplomatic breakthrough.
For now, the Strait of Hormuz — a critical artery for global energy trade — has become the centre of one of the most serious geopolitical flashpoints in recent years, with consequences that could ripple through the global economy for months.
