The escalating conflict between Iran and the US and Israel has turned into a new crisis over the Strait of Hormuz, the heart of global energy markets.
Despite claims from sources close to the Iranian Revolutionary Guard that the strait has been closed, the US Central Command (CENTCOM) announced that the strait has not been effectively closed.
Speaking to Iranian state media, Ebrahim Jabari, a senior advisor to the commander of the Revolutionary Guard, stated, “The Strait of Hormuz is closed. If anyone tries to cross, the heroes of the Revolutionary Guard and the regular navy will set those ships on fire.” This statement further escalated tensions in the region.
The Strait of Hormuz is known as the most critical energy transit point connecting the Gulf’s largest oil producers, such as Saudi Arabia, Iran, Iraq, and the United Arab Emirates, to world markets via the Gulf of Oman and the Arabian Sea. Approximately 20 percent of the world’s daily oil consumption passes through this waterway, which is about 33 kilometers at its narrowest point.
However, the US Central Command (CENTCOM) announced that the Strait of Hormuz has not been closed, despite the Revolutionary Guard’s statement. CENTCOM officials stated that Iran is not currently conducting patrol activities in the strait and there are no indications of mines being laid in the sea lane.
*This is not investment advice.