By Fariba Raad | 2025-07-11

Iran's parliament (Majles) approved a motion to close the Strait of Hormuz on June 23, threatening to weaponize the world's most critical oil transit route and trigger a global economic crisis that would hit China hardest, analysts said.

The decision sent ripples through global markets as analysts warned that closing the waterway would send crude oil prices soaring above $90 per barrel within days, with forecasts reaching $150 per barrel in a prolonged scenario.

"An unexpected spike in oil prices will not only exacerbate global inflation but also hinder economic growth and trigger a crisis that could undermine global energy security," said global energy expert Umud Shokri.

Higher energy costs would hit vulnerable populations hardest, driving up prices for food production, transportation and basic necessities in nations already facing economic fragilities, analysts said.

As the world's largest oil importer, China would bear the heaviest burden of any closure of the Strait of Hormuz, which is a chokepoint for about one-fifth of the world's oil supply.

Nearly 45% of China's oil imports pass through the waterway, and Beijing purchases 80% of Iran's oil exports, leaving it most vulnerable at a time when its economy is already grappling with industrial slowdowns.

Russia also would also face severe complications, with the United Kingdom's Ministry of Defense noting Moscow's growing dependence on Iranian drones for its military operations in Ukraine.

A prolonged closure would disrupt supply lines for these critical items, Canada-based Middle East specialist Shahram Kholdi told Al-Fassel.

"The result could be a measurable degradation in Russia’s war-fighting capacity and a recalibration of its reliance on Iran," Kholdi said.

No benefit to Iran

The closure, constituting a violation of maritime law, would offer no benefit to Iran either, as it would choke off the Islamic Republic's own oil export revenue.

US Secretary of State Marco Rubio characterized such an act as "economic suicide" for the Iranian regime.

Analysts doubt Tehran will follow through, citing overwhelming US deterrence.

The United States maintains significant naval assets in the region, including carrier strike groups and advanced missile defense systems that can be rapidly deployed to protect maritime shipping lanes.

"This threat has been a recurring posture of the Islamic Republic for 46 years," said Shahin Modarres, director of Iran Desk at the Verona-based International Team for the Study of Security.

"If carried out, it would provoke overwhelming US and allied retaliation."