Iran’s Options Include Choking Mideast Oil

It’s not just a China problem, or a Europe problem, it’s an everyone problem.

Anyone who has taken my Energy Policy course should be able to pick apart the flaws in this logic.(as a gag, but also as a memory tool, I bang on the table and chant "Oil is traded on a global market!" several times during the lecture)

— Eric Hittinger (@elephanteating.bsky.social) 2025-06-23T11:38:07.292Z

For those who aren't "in the know", oil is cheap to ship globally, so oil prices are basically the same at every major trading port in the world. There isn't really a possibility that prices go up a lot in China without the same change in the US – we all pay the global oil price.

— Eric Hittinger (@elephanteating.bsky.social) 2025-06-23T11:57:00.090Z

The one difference is that the US produces a lot of oil itself, so any rise in prices also has significant benefits for oil companies and their investors. But the effect on consumers and the broader economy would be similar to China.

— Eric Hittinger (@elephanteating.bsky.social) 2025-06-23T12:05:32.409Z

Wall Street Journal:

Roughly 20% of the world’s petroleum passes through the 20-mile-wide strait, where dozens of skyscraper-size tankers each day funnel into a pair of 2-mile-wide traffic lanes separated by a 2-mile-wide buffer. The transit through that 6-mile strip within the strait includes a similarly huge share of the world’s liquefied natural gas.
Any disruption to ship traffic could also slow Iranian energy exports, a lifeline to Iran’s economy. Although Israeli strikes have hit Iran’s domestic energy infrastructure in recent days, shipments from the country have continued flowing to oil-hungry buyers in China and elsewhere. Rystad Energy estimates that Iranian exports since the outset of Israeli strikes are actually as much as 30% to 40% higher than typical volumes this time of year. 

“Their entire economy runs through the Strait of Hormuz,” Vance said Sunday on NBC, calling a closure “suicidal.” “I don’t think it makes any sense.”

Hamidreza Azizi, a visiting fellow at the German Institute for International and Security Affairs said the likelihood of a disruption will ultimately depend on whether the conflict continues to expand—and if the regime itself is threatened in an existential way. 

“Strategically, Iran could view short-term economic sacrifice as leverage,” he said. “But it would also sacrifice its sole global energy revenue stream, bear domestic blowback and risk long-term damage to its [reputation].”