The tense scene at the Strait of Hormuz: The risk from cryptocurrency warfare in the global energy market.
Iran closed the Strait of Hormuz on Sunday, cutting off nearly one-fifth of global oil traffic, after the U.S. bombed its nuclear and missile facilities in a hasty airstrike early in the morning.
The airstrikes, following Israeli attacks that destroyed much of Iran's missile infrastructure, were directed just after midnight and carried out under the direct authorization of President Donald Trump.
The Iranian parliament voted on the same day to block the flow of goods through the strait, causing immediate concerns in the global energy market. This decision affects oil and gas tankers from the Persian Gulf to key areas like China, Europe, and South Asia, with crude oil prices expected to fluctuate sharply when markets reopen this evening.
The Iranian regime reacted quickly after Israel's attacks on several targets related to the nuclear program and military command centers this week. Despite being hit hard, Supreme Leader Ali Khamenei refused to back down and promised to inflict irreparable damage on any U.S. intervention.
In the past ten days, Iran has made several threats after accusing Israel of airstrikes causing damage. The proposal from the parliament to close Hormuz has been backed by leader Khamenei, continuing previous warnings.
Why is the Strait of Hormuz particularly important in the global oil strategy?
The Strait of Hormuz, located at the entrance to the Persian Gulf, has long been a strategic oil transport route for the world. In 2024, more than 16.5 million barrels of crude oil and condensate passed through this channel daily.
Including shipments from Saudi Arabia, Iraq, UAE, Kuwait, and Iran. Additionally, more than 20% of global liquefied natural gas also passes through here, mostly originating from Qatar.
Carriers and governments began to react before Sunday. The British government warned that commercial vessels might be disrupted due to rising tensions in the region.
Frontline Ltd., one of the largest oil tanker operators, has confirmed that it will be more cautious in supplying vessels through the region. Iran has previously attacked commercial vessels in the strait, and the tense situation following the Israeli airstrikes has raised early warnings for the shipping and energy industries.
There is no international law allowing Iran to blockade Hormuz, so this action is entirely based on military power. However, Iran does not necessarily have to deploy its fleet. Alternatives include fast patrol boats, drone attacks, and coastal missile strikes.
These tactics are enough to make shipping routes through the strait unsafe. The U.S. Navy and European allies have maintained a presence in the region, but the risks have forced some operators to delay or adjust their cargo routes.
Movements of the global shipping market and reactions of oil prices.
Trade has not only been disrupted in the Persian Gulf. Traffic through the Red Sea and Gulf of Aden has decreased by about 70% compared to the average in 2022-2023.
The U.S.-led forces have been deployed to protect shipping vessels, but an alternative option is to navigate around the Cape of Good Hope in South Africa, increasing costs and transit time between Asia and Europe. In this context, inflation may rise if the situation does not de-escalate soon.
Nevertheless, Iran also faces consequences from the closure of the Strait. The country heavily relies on oil transportation out of the Persian Gulf. Although it has opened a center in Jask to reduce dependence on the strait, the capacity of this center is still limited.
This closure action could have diplomatic backlash, especially with China, Iran's largest oil customer. China has previously used its veto power at the United Nations Security Council to protect Iran from Western sanctions, but it will be tested if their energy supply is affected.
Some countries like Saudi Arabia and the UAE may be more flexible. Riyadh can transport oil through a 746-mile pipeline to the Red Sea, avoiding the Strait of Hormuz and the conflict area south of the Persian Gulf.
The UAE transports about 1.5 million barrels/day through a pipeline connecting to Fujairah in the Gulf of Oman. Meanwhile, Iraq, Qatar, Kuwait, and Bahrain have no alternatives, as most of their oil still has to pass through Hormuz, primarily to Asian markets.
Analyses from SEB and Saxo Bank predict that Brent oil prices could rise by $3 to $5 per barrel after ending Friday’s session at $77.01. West Texas Intermediate closed at $73.84. Ole Hansen from Saxo Bank stated that if investors start to pull long positions, prices could rise an additional $4 to $5.
Since June 13, when Israel began major airstrikes on Iranian nuclear targets, Brent oil prices have risen by 11%, and WTI has increased by 10%. Although stabilized by OPEC's spare reserves and steady production, if Iran continues to close Hormuz and tensions escalate, current protective measures will not be sufficient to keep prices stable.
Source: https://tintucbitcoin.com/iran-phong-toa-hormuz-dung-20-dau-toan-cau/
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