Tensions Rise as Iran Threatens to Close Hormuz Strait
The closure of the Strait of Hormuz would have significant global trade implications, affecting countries that import oil from the Gulf and those that don't. The conflict between Iran and Israel has already led to a surge in global oil prices, and analysts warn that the situation could escalate further, leading to a spike in prices and disrupting oil supplies.
The Strait of Hormuz, a critical waterway connecting the Persian Gulf to the Gulf of Oman, is at the center of rising tensions between Iran and Israel, with Iran considering closing the strait, which could send oil prices soaring and risk expanding the war.
About 20% of global oil consumption flows through the Strait of Hormuz, making it the "world's most important oil transit chokepoint." The narrow shipping lanes make it vulnerable to attacks and threats of being shut down. The US has naval military assets in the region and has stressed that it would not tolerate an Iranian move against the Strait, warning that closing it would likely invoke retaliation and could spark a military response.
The conflict between Iran and Israel has already led to a surge in global oil prices, with Brent crude reaching its highest level since January. The price of crude oil affects the cost of fuel, food, and other commodities, and analysts warn that the conflict could disrupt oil supplies, potentially leading to a spike in prices. However, other oil producers could increase output to limit the price rise.
Jordan and Lebanon have reopened their airspace to civilian aircraft, citing a belief that there is no longer an immediate danger of further attacks after crossfire between Israel and Iran disrupted East-West travel through the Middle East. However, the countries are continuing to assess risks to civil aviation and monitor developments. Iran's civil aviation authority has declared the country's airspace closed "until further notice."
The UN chief has urged maximum restraint after Israel's wave of air strikes on Iran, saying peace and diplomacy must prevail. A sixth round of US-Iran nuclear talks is scheduled to take place in Oman on Sunday, but it is unclear whether it will go ahead. The US has denied allegations of complicity in Israel's attacks on Iran, telling Tehran that it would be wise to negotiate over its nuclear program.