Strait of Hormuz Chokepoint Threat Sparks Oil Market Concerns

Iran’s parliament has adopted a resolution to close—or at least threaten—closure of the Strait of Hormuz, a strategic maritime chokepoint funneling nearly 25% of the world’s oil flows. Though non-binding at this stage, the move has intensified supply disruption fears, placing oil prices on alert.

While closing the strait would mark a dramatic escalation, historical precedents have avoided full blockades. Nonetheless, markets are already pricing in risk premia: crude has seen intraday spikes, and shipping insurers are tightening coverage in the region.

Energy companies and import-dependent economies are now reassessing supply chains. This geopolitical flashpoint may nudge OPEC+ countries, including Saudi Arabia, to maintain production levels even amid global excess, aiming to prevent further price surges and market instability.