Revolutionary Guards chief vows to choke off 20% of global energy supplies as Parliament backs closure of vital shipping lane
IRAN is threatening to hold the world economy hostage by shutting down a critical oil artery that could send petrol prices soaring and trigger a global financial meltdown “worse than Covid and Putin combined”.
In a menacing escalation that has world leaders scrambling, Tehran’s parliament has reportedly approved plans to block the Strait of Hormuz — the narrow waterway through which a fifth of the planet’s oil supplies flow.
The chilling threat comes as Iranian lawmaker and Revolutionary Guards Commander Esmail Kosari told local media that closing the vital shipping lane “is under consideration” and “will be done whenever necessary”.
But here’s the terrifying reality: if Iran follows through on its threat, your energy bills could skyrocket overnight whilst the global economy plunges into chaos.
THE WORLD’S OIL JUGULAR
The Strait of Hormuz isn’t just any waterway — it’s the planet’s most important oil transit chokepoint.
At its narrowest point, it’s just 21 miles wide, with shipping lanes even tighter at only two miles in each direction. Yet through this maritime bottleneck flows around 20% of global oil consumption and the same proportion of all Liquefied Natural Gas (LNG).
According to the US Energy Information Administration, about 20 percent of global oil consumption flows through the strait, making it absolutely vital for the world’s energy security.
What makes this threat so alarming? Unlike other shipping routes, there’s simply no way around it. There is no way to ship anything by sea out of the Gulf without going through Hormuz.
Every drop of oil from Saudi Arabia, Kuwait, Iraq, the UAE and Qatar must pass through this narrow corridor. That’s nearly 20 million barrels every single day.
‘WORSE THAN CORONA AND PUTIN COMBINED’
Trade expert Gerrit Heinemann pulled no punches when he told Bild newspaper that an Iranian blockade would be “catastrophic”.
His stark warning? “[It would be] worse than Corona and Putin combined! The second episode of the ongoing crisis would be even more severe than what we experienced at the beginning of the Ukraine war and during the Corona years. A disaster”.
Heinemann painted a grim picture of the knock-on effects: “A large part of the global supply chains runs through the affected region. This not only dramatically impacts energy supplies, but also the flow of goods”.
The consequences would hit every aspect of daily life. All of a sudden, all the crises we had just overcome would return: the energy crisis, inflation, disrupted supply chains, and now the threat of mass unemployment.
PARLIAMENT BACKS ‘DOOMSDAY’ OPTION
The threat reached new heights on Sunday when Esmail Kosari was quoted on Iranian media as saying: “For now, [parliament has] come to the conclusion we should close the Strait of Hormuz, but the final decision in this regard is the responsibility of the Supreme National Security Council”.
Kosari, who is also a Revolutionary Guards Commander, had earlier on Sunday told the Young Journalist Club that closing the strait was on the agenda and “will be done whenever necessary”.
When pressed about whether Tehran would actually pull the trigger on this economic weapon, Foreign Minister Abbas Araqchi dodged the question on Sunday and replied: “A variety of options are available to Iran”.
The ambiguous response has only heightened fears that Iran is seriously considering the nuclear option for global trade.
OIL PRICES COULD HIT $300 A BARREL
The economic impact would be instant and devastating. Iraq’s foreign minister Fuad Hussein warned that the continuation of the war could trigger a global economic crisis—particularly if the conflict spreads to the Strait of Hormuz, which would disrupt energy supplies and drive global inflation.
Even more alarming, Iraqi Foreign Minister Fuad Hussein warned during a phone conversation with German Foreign Minister Johann Wadephul that oil prices could surge to between $200 and $300 per barrel “if military operations were to break out, which would significantly increase inflation rates in European countries and complicate oil exports for producing states such as Iraq.
Hussein issued a stark warning that the closure of the Strait of Hormuz by Iran could remove nearly five million barrels of oil per day from global markets, exacerbating the current economic crisis.
To put that in perspective, oil currently trades around $75 per barrel. A jump to $300 would mean petrol prices at the pump could quadruple almost overnight.
‘LAST RESORT’ WEAPON
But it’s not just about ships being unable to pass through. Iran has spent decades preparing for this moment, amassing an arsenal perfectly suited to shutting down the strait.
“Iranian forces are highly skilled in asymmetric warfare and have prepared for decades for a scenario involving attacks against shipping through the Straits of Hormuz and adjacent waters,” he said. Iran can start attacking shipping with almost no notice and certainly faster than the time it takes to sail a ship through the Straits of Hormuz.
The Islamic Republic’s toolkit includes:
- Fast attack boats that can swarm larger vessels
- Naval mines that could be rapidly deployed
- Anti-ship missiles positioned along the coastline
- Kamikaze drones capable of striking tankers
Yet experts note this would be a desperate gambit. Closing the Strait of Hormuz would run the additional risk of alienating Iran’s foreign partners, especially China, which imports significant amounts of Iranian and other Middle East oil.
SHIPPING GIANTS ALREADY NERVOUS
The mere threat is already having an impact. Some shipowners are opting to steer clear of the strategically important Strait of Hormuz, according to the world’s largest shipping association, reflecting a growing sense of industry unease as the Israel-Iran conflict rages on.
Freight rates jumped after the Israeli attacks on Iran last week. Indeed, data published Monday from analytics firm Kpler showed Mideast Gulf tanker freight rates to China surged 24% on Friday to $1.67 per barrel.
Insurance costs are also spiking as the risk of transit through the region increases — costs that will ultimately be passed on to consumers at the petrol pump and in higher prices for goods.
WEST POWERLESS TO STOP IT?
What’s truly frightening is how difficult it would be to prevent Iran from carrying out its threat. The Strait of Hormuz is a vast and natural waterway over 30 kilometres wide at its narrowest point. Iran controls only the northern half of the Strait. The southern half is under the control of Oman.
Yet even partial disruption could be catastrophic. During the 1980s “Tanker War”, both Iran and Iraq attacked oil tankers in the Gulf, causing oil prices to spike and forcing the US Navy to escort vessels through the region.
This time could be far worse. Modern weapons, including sophisticated drones and missiles, give Iran capabilities it didn’t possess in the 1980s.
CHINA HOLDS THE KEY
Ironically, Iran’s biggest ally could be its biggest obstacle to closing the strait. China does not want the flow of oil out of the Persian Gulf to be disrupted in any way, and China does not want the price of oil to rise,” Ellen Wald, president of Transversal Consulting, told CNBC. So they’re going to bring the full weight of their economic power to bear on Iran”.
China is the number one importer of Iranian oil, reportedly accounting for over three-quarters of its oil exports. Beijing won’t be happy if its energy supplies are cut off and prices skyrocket.
But will that be enough to stop Tehran if it feels cornered?
THE WORLD WATCHES AND WAITS
As tensions continue to escalate, the question isn’t whether Iran could close the Strait of Hormuz — it’s whether they actually would.
The US Navy’s Fifth Fleet, stationed in nearby Bahrain, stands ready to respond. But reopening the strait after Iran moves to close it could take weeks or even months of dangerous military operations.
For now, State broadcaster Press TV reported on Sunday that while Iran’s parliament has already approved the measure, the final decision rests with the top national security authority.
That means the fate of the global economy now rests in the hands of Iran’s Supreme Leader Ayatollah Ali Khamenei.
One thing’s certain: if Iran pulls the trigger on this economic doomsday weapon, we’ll all feel the pain at the petrol pump — and far beyond.
Image credit: Dr. Seyed Abbas Araghchi (51102694356) (cropped) by Mehr News Agency, licensed under CC BY 4.0, via Wikimedia Commons.
