Why Iran won’t block the Hormuz Strait oil artery even as war with Israel looms
Tankers depicted in the Strait of Hormuz — a strategically important waterway which separates Iran, Oman and the United Arab Emirates.
ATTA KENARE | AFP | Getty Images
As tensions surge following Israeli strikes on Iran, fears have resurfaced that the Tehran could retaliate by targeting one of the world’s most vital oil arteries — the Strait of Hormuz.
The Strait of Hormuz, which connects the Persian Gulf to the Arabian Sea, sees roughly 20 million barrels per day of oil and oil products pass through, accounting for nearly one-fifth of global oil shipments. Any move to block it would ripple through energy markets.
However, market watchers believe a full-scale disruption of global oil flows by closing the waterway is unlikely, and might even be physically impossible.
There really is “no net benefit” that comes with impeding the passage of oil through the Strait of Hormuz, especially given how Iranian oil infrastructure has not been directly targeted, said Ellen Wald, President of Transversal Consulting. She added that any such action would likely trigger further retaliation.
She also warned that any major spike in oil prices caused by a closure could draw backlash from Iran’s largest oil customer: China.
Their friends will suffer more than their enemies… So it’s very hard to see that happening.
Anas Alhajji
Energy Outlook Advisors
“China does not want the flow of oil out of the Persian Gulf to be disrupted in any way, and China does not want the price of oil to rise. So they’re going to bring the full weight of their economic power to bear on Iran,” Wald explained.
China is the number one importer of Iranian oil, reportedly accounting for over three-quarters of its oil exports. The world’s second-largest economy is also Iran’s largest trade partner.
“Their friends will suffer more than their enemies … So it’s very hard to see that happening,” said Anas Alhajji, managing partner at Energy Outlook Advisors, adding that disrupting the channel could be more of a bane than a boon for Tehran, given how most of Iran’s daily consumption goods come via that route.
“It’s not in their interest to cause problems because they will suffer first.”
Iran in 2018 threatened to shut the Strait of Hormuz when tensions spiked following the U.S. withdrawal from the nuclear deal and the reimposition of sanctions. Prior to that, another major threat reportedly came in 2011 and 2012, when Iranian officials, including then–Vice President Mohammad-Reza Rahimi, warned of a potential closure if the West slapped further sanctions on its oil exports over its nuclear program.
Impossible to close the strait?
The Strait of Hormuz, which is 35 to 60 miles (55 to 95 kilometers) wide, connects the Persian Gulf and the Arabian Sea.
The idea of shutting the Hormuz waterway has been a recurring rhetorical tool but never been acted upon, with analysts saying that it’s simply not possible.
“Let’s be real about the Strait of Hormuz. First of all, most of it is in Oman, not in Iran. Number two, it’s wide enough that the Iranians cannot close it,” said Alhajji.
Similarly, Transversal Consulting’s Wald noted that although many ships pass through Iranian waters, vessels can still traverse alternative routes via the United Arab Emirates and Oman.
“Any blockade of the Strait of Hormuz will be a ‘last resort’ option for Iran and likely contingent on a military engagement between U.S. and Iran,” said Vivek Dhar, Commonwealth Bank of Australia’s director of mining and energy commodities research.
RBC Capital Markets’ Helima Croft suggested that while there could be some disruption, a full-scale blockade was unlikely.
“It is our understanding that it would be extremely difficult for Iran to close the strait for an extended period given the presence of the US Fifth Fleet in Bahrain. Nevertheless, Iran could still launch attacks on tankers and mine the strait to disrupt maritime traffic,” said Croft, head of global commodity strategy and MENA research at RBC.
U.S. President Trump has warned of possible military action if negotiations with Iran over its nuclear program break down, but it is uncertain whether these threats are meant to raise the stakes of U.S.-Iran talks or simply to increase pressure at the negotiating table, said Dhar.
Israel carried out a wave of airstrikes on Iran early Friday morning local time, claiming the attacks were aimed at facilities linked to Tehran’s nuclear program.
According to Iranian state media, the strikes killed Mohammad Hossein Bagheri, chief of the Iranian Armed Forces, along with Hossein Salami, the commander-in-chief of Iran’s Islamic Revolutionary Guard Corps.
While a closure of the strait remains highly unlikely, the escalating conflict has prompted some to consider even the faint possibility.
“[Closing the strait] is kind of an extreme scenario, although we are in an extreme situation,” said Amena Bakr, head of Middle East and OPEC+ insights at Kpler.
“So that’s why I’m not putting that option completely off the table. We need to consider it.”
Crude futures jumped as much as 13% after Israel launched airstrikes against Iran early Friday. Global benchmark Brent futures were up 6.5% at $73.88 per barrel as of 4.30 p.m. Singapore time, while the U.S. West Texas Intermediate was trading 6.7% higher at $72.57 per barrel.
Kia wants your next vacation to be a little greener. The PV5, Kia’s electric van, is getting a new role as a high-end people mover at eco-friendly luxury resorts.
Kia launches PV5 pilot at Red Sea Global’s luxury resorts
You can use the PV5 as a daily driver, delivery van, or even to start a pop-up mobile shop, but now it has found a new use.
Kia launched a new demonstration project on September 29 with Red Sea Global (RSG), one of the developers behind Saudi Arabia’s new gigaprojects.
The project is “the first step toward smarter mobility” as Saudi Arabia aims to break away from its oil-centric economy.
Kia will provide the PV5 Passenger model for the demo, but promises much more is on the way. The Korean automaker will also help train workers, teaching them about electric vehicles, new technology, and other clean energy solutions.
Kia’s electric vans will be used as customized people movers at RSG’s new resorts and wellness tourism complex in Riyadh, Saudi Arabia.
Breaking free from oil opens up a new market
The site, located along the Red Sea, is one of five gigaprojects designed to help the oil-rich nation reduce its dependence on fossil fuels.
Saudi Arabia’s plans, part of its Vision 2030 strategy, include a futuristic new city in Neom, an entertainment complex in Qiddiya, a residential development in Roshn, and a heritage site in Diriyah.
Essentially, Saudi Arabia aims to transition from relying on oil revenue to power its economy to generating profits from tourism.
“Saudi Arabia is a very important market,” Jeong Ho-geun, Executive Vice President of Hyundai Motor Group’s Future Strategy Division, said, adding that the PV5 pilot is likely just the start.
A PV5 cargo designed for resort logistics and a custom PV5 conversion model could also be in the pipeline, the company said, which would be used at RSG’s high-end resorts. The larger PV7 electric van, set to launch in 2027, is “a possibility.”
With the PV5 arriving as a high-end shuttle in Saudi Arabia, will Kia launch it in other countries for use at resorts? It wouldn’t be a surprise.
Kia’s electric van is already rolling out in Europe, South Korea, and other global markets. The PV5 Passenger and Cargo, designed for personal and business use, are available in parts of Europe and South Korea.
During its PV5 Tech Day event over the summer, Kia revealed plans to launch seven new body types, including a “prime” luxury Passenger model, an open bed (similar to a pickup), and even a light camper version. What’s next?
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A video circulating on social media this morning has electric bike fans cheering and Homeland Security officers scratching their heads after a man who is reported to be a delivery rider appeared to evade a group of Immigration and Customs Enforcement (ICE) agents in Chicago using nothing more than some quick footwork and an e-bike.
The short clip opens on a fairly routine city sidewalk scene, otherwise ordinary except for the group of around a dozen ICE agents, most with faces obscured and wearing a variety of mismatched uniforms and various military-style fatigues. There doesn’t appear to be any active law enforcement incidents or a clear reason for the large force, and the agents seem to be standing idly in a group on the sidewalk. The delivery rider can be seen walking his bike nearby and bending down to pick something up off the ground, which is followed by one of the agents lunging at him to try and grab him.
Startled, the man stumbles away, pushing his delivery e-bike with him and breaking into an awkward, zig-zagging escape. What follows looks more like a low-budget action comedy than a coordinated enforcement effort, as nearly a dozen ICE officers give chase in what looks like a confused herd. The video has been edited to add the Benny Hill theme song, further lightening the mood.
The rider, clearly no stranger to improvisation, darted past the agents while pushing his e-bike, sometimes switching directions to throw them off or using strangers as a screen to evade the officers, before finally hopping into the air and landing butt-first on his bike to zip away. The last few officers continued to chase the rider briefly as he increased the distance, before they eventually abandoned the pursuit and awkwardly returned to the sidewalk. The cyclist pedaled away, perhaps indicating that the likely throttle-enabled e-bike hadn’t even been turned on at the time.
It’s unclear what prompted the attempted stop or if ICE agents were actually targeting the man specifically. Many have pointed out recently that such encounters are typical with ICE agents seen simply stopping people of color, often times delivery workers and other laborers.
One thing is for sure, though: As we’ve often said, e-bikes really may be the fastest way around a city, regardless of whether or not you’re being pursued.
Electrek’s Take
Obviously, if police are attempting to legally detain you, evading is not recommended. We don’t have enough context from the video to determine exactly why the ICE agents suddenly lunged at the man. From the video, the incident appears to have started after a single officer decided to attempt to grab the man, and not because he was the target of an investigation. Recent ICE roundups have been widely accused of selective enforcement, mostly preying upon people of color and in working-class areas.
ICE agents are only legally allowed to stop individuals if they have reasonable suspicion that the person has committed a crime, such as an immigration violation.
Electric bicycles continue to be one of the most effective ways to move quickly and efficiently around urban areas.
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