The escalation in mid-June 2025, marked by Israeli strikes against Iranian military and energy infrastructure and Iran’s subsequent missile and drone reprisals, has heightened concerns over a potential disruption of the Strait of Hormuz—one of the world’s most critical energy chokepoints. Geospatial shipping intel shows that roughly 20 million barrels per day (bpd) of crude oil— approximately 20 % of global petroleum liquids and nearly 30 % of seaborne oil trade—transit the strait through vessels that operate narrow 21 mile navigation lanes. Disruption here would ripple across energy markets and supply chains.
Iran’s strategic gamble in threatening closure is blunt but perilous. Such a blockade could weaponize nearly one fifth of global oil and LNG flows, yet Tehran would simultaneously cripple its own export lifeline. Today, Iran ships over 1.6 mbpd of crude—largely to China—via Hormuz, and more than 80 % of its broader cargo traffic depends on ports served through the strait. Any shutdown would be self defeating unless offset by covert or alternate routes, which remain marginal (e.g., Goreh Jask pipeline at ~300 kbd).
What makes this scenario even more geopolitically complex is that both Qatar and China—two of the most exposed nations to a Hormuz disruption—are among Iran’s more diplomatically aligned or non-confrontational partners. Qatar has maintained pragmatic ties with Tehran, while China has deepened energy and trade relations with Iran despite Western sanctions. A closure of the Strait would, paradoxically, inflict the greatest harm on Iran’s own allies and key economic partners, underscoring the selfdefeating nature of such an action. Indeed, Qatar is uniquely vulnerable. It exports around 81 million tons of LNG annually—the equivalent of some 21 % of global LNG trade, virtually all of which must cross Hormuz. A refinery or shipping disruption would reduce Asian LNG supplies, pushing spot and long term contract prices higher, potentially destabilizing China. More specifically, in 2024, more than 25% of China’s LNG imports came via this route, with Qatar supplying 18.35 million metric tons — nearly 24% of China’s total LNG intake. Since February, Qatar has overtaken Australia to become China’s top LNG supplier. China has also signed 15 long-term LNG contracts with Qatar and the UAE, totaling nearly 30 million mt/year. If flows through Hormuz are interrupted, Chinese buyers may have to turn to the spot market — where prices are already under upward pressure.
In addition to that, China, the world’s largest crude importer at ~11.1 mbpd (74 % of its consumption in 2024), relies significantly on Middle Eastern suppliers, including Saudi Arabia, Iraq, Oman— and importantly, Iran. Roughly one third of China’s oil imports originate from Gulf producers, and Asian markets take in over 80 % of flows through Hormuz. A temporary embargo could dislocate China’s refinery throughput and push Beijing to snap up expensive spot barrels or reroute to alternative logistics.
However, while Iran’s threat to close the strait is more likely strategic posturing than sustained action, from a maritime shipping vantage, insurance premiums, and by extension freight rates, have already begun climbing. Frontline, a major tanker operator, has suspended contracts passing through the strait, escorting existing vessels under naval protection; rerouting and insurance costs have sent shipping rates sharply higher. Mitsui-OSK Lines similarly reports that Gulf traffic remains essential but under continuously reassessed risk protocols. Meanwhile, Gulf Oman tugand-evacuation resources have already been deployed following a tanker collision in the region, amplifying risk perception in maritime corridors. The increase in insurance premiums and forced detours could raise tanker and LNG shipping costs, squeezes that are ultimately passed on to end users.
In sum, while an outright closure of the Strait of Hormuz remains a high-risk, low-probability scenario, even partial disruptions or strategic signaling by Iran have tangible economic consequences. The nations most affected—Qatar, China, and other Iran-aligned or Gulf-dependent importers—are already absorbing the impact through higher freight costs, tighter shipping availability, and elevated energy prices. For Iran, any closure would ultimately represent self-harm. Yet from a maritime shipping and freight market standpoint, the mere threat is enough to disrupt global logistics and inject significant instability into the heart of the energy transportation system.
Data Source: Intermodal