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Yahoo
21-06-2025
- Business
- Yahoo
Iran hasn't yet made the Strait of Hormuz central in its fight with Israel. Here's how that could change.
Iranian threats to block energy shipments through the Straight of Hormuz and the fate of the nation's own oil and natural gas production efforts have been anxiously watched since the beginning of its conflict with Israel. So far, both fronts have been on the sidelines, with observers closely monitoring what changing war dynamics could signal about the ultimate economic consequences of this conflict. Oil futures have risen over 10% since the fighting started; the sense among analysts is that price pressures could ease if the war remains contained. But things could quickly go sideways — for oil markets and the global economy — if the coming weeks bring concrete signs of escalation around the Strait of Hormuz. "Should this key economic chokepoint be closed, that kind of disruption would send the price of oil toward $100 per barrel, or even above that," wrote Joe Brusuelas, the chief economist for RSM US, in a Friday note. Analysts at JPMorgan Chase have echoed these worries, calling a blocking of the Strait the "worst-case scenario" and suggesting the result could be to push inflation in the US to 5%. That's because this narrow waterway is where about 20% of the world's oil and seaborne natural gas shipments pass between oil-producing Gulf states — not just Iran, but Saudi Arabia, Kuwait, Iraq, and others — and the rest of the world. Iran has only made noise so far about closing the Strait, but at least one Iranian leader has reportedly said the US military getting involved could increase the odds. Ali Yazdikhah, an Iranian lawmaker, was quoted by the country's semi-official Mehr news agency as saying, "If the United States officially and operationally enters the war ... it is the legitimate right of Iran in view of pressuring the US and Western countries to disrupt their oil trade's ease of transit." Meanwhile, President Trump offered a move toward diplomacy in recent days, saying he will decide in the next two weeks about US action but also pushing back on notions he's taking threats of force off the table. As he told reporters recently, "I may do it, I may not do it. Nobody knows what I'm going to do." Noam Raydan, who studies energy and maritime risks at the Washington Institute for Near East Policy, notes that plenty of Iranian oil moves through the Hormuz passageway, so "there's no reason for Tehran at the moment to block the Strait unless it really wants to shoot itself in the foot." How that changes, she notes, is if Iran's oil infrastructure is severely damaged. "Iran will shut the Strait once it cannot export — this is my simple answer," Raydan said. But that scenario is a long way off for now, with Israel apparently focusing most of its attacks away from fossil fuel facilities. Indeed, oil disruptions in Iran have been minimal despite fears that followed one Israeli strike on an oil refinery in Tehran. This has left the world, including Federal Reserve Chair Jerome Powell, in a sort of wait-and-see mode. "We're watching like everybody else is," the central banker told reporters this past week, though Powell suggested an easing of economic pressure is likely unless tensions in the region spike to levels not seen in nearly 50 years. What also could emerge to rattle markets — though perhaps less dramatically — are other measures Iran has at its disposal. These range from terrorist attacks to the seizing of some commercial ships. Experts note that Iran has a variety of other means to disrupt the world economy if its military situation gets more desperate. Suzanne Maloney, the director of the foreign policy program at the Brookings Institution, noted in a recent analysis that Iran could run out of existing countermeasures soon and that a further escalation may include things like small-scale terrorist attacks and cyberattacks in addition to threats to the Strait of Hormuz. But, she noted, these are options that "all entail risky tradeoffs, especially the prospect of precipitating US military intervention, which Tehran would prefer to avoid." The Washington Institute's Raydan offered another possible disruption to watch, noting that "Iran is known for seizing commercial ships in the region in retaliation to US actions ... so I'd say ship seizures are something to watch, and Iran has experience in that." Possible attacks on shipping were also brought up in a recent Capital Economics analysis that laid out the effects of four potential scenarios in the weeks ahead, ranging from a short conflict to regime change. Perhaps the most economic uncertainty could come with a scenario of "long-lasting conflict with no off-ramp," which, the group noted, could include regular attacks in the months ahead on shipping and energy transit from both Iran and its proxies. That's a scenario, they wrote, that "might result in a long-lasting higher oil price in the range of $130-$150 [per barrel], lift inflation in advanced economies by 2-2.5%-pts by end-2025 and would be a major risk-off event in markets." But the bottom line, the economists added, is that "we may not know the endgame for some time." Ben Werschkul is a Washington correspondent for Yahoo Finance. Click here for political news related to business and money policies that will shape tomorrow's stock prices
Yahoo
21-06-2025
- Politics
- Yahoo
Iran's options against foreign aggression include closing Strait of Hormuz, lawmaker says
DUBAI (Reuters) -Iran could shut the Strait of Hormuz as a way of hitting back against its enemies, a senior lawmaker said on Thursday, though a second member of parliament said this would only happen if Tehran's vital interests were endangered. Iran has in the past threatened to close the Strait of Hormuz to traffic in retaliation for Western pressure, and shipping sources said on Wednesday that commercial ships were avoiding Iran's waters around the strait. "Iran has numerous options to respond to its enemies and uses such options based on what the situation is," the semi-official Mehr news agency quoted Behnam Saeedi, a member of the parliament's National Security Committee presidium as saying. "Closing the Strait of Hormuz is one of the potential options for Iran," he said. Mehr later quoted another lawmaker, Ali Yazdikhah, as saying Iran would continue to allow free shipping in the Strait and in the Gulf so long as its vital national interests were not at risk. "If the United States officially and operationally enters the war in support of the Zionists (Israel), it is the legitimate right of Iran in view of pressuring the U.S. and Western countries to disrupt their oil trade's ease of transit," Yazdikhah said. President Donald Trump is keeping the world guessing about whether the United States will join Israel's bombardment of Iranian nuclear sites. Tehran has so far refrained from closing the Strait because all regional states and many other countries benefit from it, Yazdikhah added. "It is better than no country supports Israel to confront Iran. Iran's enemies know well that we have tens of ways to make the Strait of Hormuz unsafe and this option is feasible for us," the parliamentarian said. The Strait of Hormuz lies between Oman and Iran and is the primary export route for Gulf producers such as Saudi Arabia, the United Arab Emirates, Iraq, and Kuwait. About 20% of the world's daily oil consumption — around 18 million barrels — passes through the Strait of Hormuz, which is only about 33 km (21 miles) wide at its narrowest point.
Economic Times
19-06-2025
- Business
- Economic Times
Iran may close Strait of Hormuz if US decides to join war on Israeli side but does President Donald Trump have constitutional power to make a decision?
Iran has issued a strong warning about its strategic position in the Strait of Hormuz. The warning came amid growing tensions between Iran and Israel. The statement suggests Iran may act if the United States gets involved in the Member of Parliament Ali Yazdikhah said that Iran has the right to close the Strait of Hormuz. He made this statement on Thursday. Yazdikhah explained this would happen only if the United States enters the conflict alongside Israel. The Strait of Hormuz is a key route for global oil shipments. Abu Ali al-Askari, a spokesperson of a group allied with Iran, issued a warning. He said that if the United States supports Israel militarily, US assets in the region will face attacks. He mentioned US bases could come under fire and shipping routes like the Strait of Hormuz and Bab al-Mandeb might close. He also said that oil ports in the Red Sea would shut down. He warned of potential damage to US aircraft. Also Read: Call of Duty: Black Ops 6 Rivals Event: How to earn rewards? See start date, time, rewards and when is next scheduled event White House press secretary Karoline Leavitt spoke about the US stance. She said President Donald Trump will make a decision in the next two weeks. The decision will depend on possible future negotiations with Iran. Trump shared that there is a chance for talks, but no clear plan has been made yet. Oil prices have increased due to rising tensions. Israel and Iran have continued to exchange missile strikes. On Thursday, Brent crude futures rose by $1.60 to reach $78.29 a barrel. US West Texas Intermediate crude also rose to $78.34. Oil prices had already peaked at $78.50 on June 13 when Israel launched Read: Iran Israel Conflict: Does Israel have a nuclear arsenal? All you may want to know The Strait of Hormuz handles about 20 percent of the world's oil supply. If the strait is closed, oil supply may drop. That could raise the cost of goods and fuel. Trade, shipping, and travel might also slow US Constitution gives Congress the power to declare war, while the president is commander in chief. Presidents can respond to threats but need congressional approval for extended military action. A federal law limits presidential war powers, requiring Congress to be notified within 48 hours and consulted before troops are deployed, unless war is formally declared. Why is the Strait of Hormuz important? It carries 20 percent of global oil, so any disruption can affect prices and supply across the world. When will the US decide on involvement? President Trump is expected to decide within two weeks, based on whether talks with Iran may happen.
Miami Herald
19-06-2025
- Politics
- Miami Herald
Iran Threatens To Close Strait of Hormuz: What Would Happen?
Iran has warned that it could shut the Strait of Hormuz, one of the world's most critical oil transit chokepoints, in retaliation for U.S. involvement in its conflict with Israel. "If the United States officially and operationally enters the war in support of the Zionists (Israel), it is the legitimate right of Iran in view of pressuring the U.S. and Western countries to disrupt their oil trade's ease of transit," Ali Yazdikhah, a senior Iranian lawmaker, was quoted as saying by the semi-official Mehr news agency on Thursday. "Iran has numerous options to respond to its enemies," Behnam Saeedi, a member of the parliament's National Security Committee presidium was quoted as saying. "Closing the Strait of Hormuz is one of the potential options." The officials spoke amid heightened tensions as President Donald Trump is reported to be inching closer to ordering military strikes on Iran's nuclear facilities. Newsweek has contacted the White House for comment by email. The Strait of Hormuz is a narrow waterway connecting the Persian Gulf to the Gulf of Oman and the Arabian Sea. At its narrowest point, the strait is about 21 miles wide, with two shipping lanes two miles wide in each direction. The strait handles around 26 percent of global oil trade, making it one of the most strategically important maritime passages in the world. The International Energy Agency notes that any disruption to flows through the strait would have significant consequences for world oil markets. Iran has long asserted that it can shut down the Strait of Hormuz. While the strait can't be "closed" in the traditional sense - like shutting a road - Iran could attempt to make the waterway too dangerous for commercial passage, effectively disrupting global shipping. During the Iran-Iraq War in the 1980s, Iran targeted oil tankers and oil loading facilities with mines and missiles, including Chinese-made Silkworm cruise missiles, and used speedboats to harass tankers. These actions did not fully block the strait but caused sharp increases in shipping insurance premiums and delayed maritime traffic. According to a 2012 report by the U.S. Congressional Research Service (CRS), Iran could try to obstruct the strait in phases. "Iran might begin with a less violent option and progress over time to more violent ones, or implement a combination of highly violent options from the outset," it said. Possible measures cited in the report included: Declaring the strait closed to shipping without without stating explicitly what the consequences might be for ships that attempt to transit those watersDeclaring more explicitly that ships transiting the strait or other parts of the Persian Gulf are subject to being intercepted and detained, or attackedFiring warning shots at ships transiting the strait or other parts of the GulfDeploying sea mines in the strait and other parts of the GulfUsing submarines, surface ships, shore-based cruise missiles, and aircraft to attack foreign naval ships operating in waters outside the Strait Iran moving to shut the Strait of Hormuz would likely invite a strong international military response. "An outright closure of the Strait of Hormuz... at present, this appears to be a low probability event. Were this to occur, it is not likely to be prolonged," said the CRS. "It would likely trigger a military response from the United States and others, which could reach beyond simply re-establishing strait transit," it added. "Iran would also alienate countries that currently oppose broader oil sanctions. Iran could become more likely to actually pursue this if few or no countries were willing to import its oil." President Donald Trump told reporters on Wednesday: "I'm not looking to fight. But if it's a choice between fighting and [Iran] having a nuclear weapon, you have to do what you have to do, and maybe we won't have to fight." Ayatollah Ali Khamenei, Supreme Leader of Iran, said in a public address: "The Americans should know that any U.S. military intervention will undoubtedly be accompanied by irreparable damage. The U.S. entering in this matter is 100 percent to its own detriment. The damage it will suffer will be far greater than any harm that Iran may encounter." The foreign ministers of Germany, France and Britain have scheduled nuclear talks in Geneva on Friday with Iranian Foreign Minister Abbas Araqchi, according to Reuters. Related Articles US Support For Donald Trump Attacking Iran Revealed in PollsIranian Jewish Leader Denounces Israel's 'Savage' Attacks on IranIran Issues New Warning to US- 'All Necessary Options on The Table'Former Spy Chief: 'Good Case' for US To Strike Iranian Nuclear Site 2025 NEWSWEEK DIGITAL LLC.
Time of India
19-06-2025
- Business
- Time of India
Iran may close Strait of Hormuz if US decides to join war on Israeli side but does President Donald Trump have constitutional power to make a decision?
Iran has issued a strong warning about its strategic position in the Strait of Hormuz . The warning came amid growing tensions between Iran and Israel. The statement suggests Iran may act if the United States gets involved in the conflict. Iran Signals Possibility of Strait Closure Iranian Member of Parliament Ali Yazdikhah said that Iran has the right to close the Strait of Hormuz. He made this statement on Thursday. Yazdikhah explained this would happen only if the United States enters the conflict alongside Israel. The Strait of Hormuz is a key route for global oil shipments. Iran-Allied Group Issues Warning Abu Ali al-Askari, a spokesperson of a group allied with Iran, issued a warning. He said that if the United States supports Israel militarily, US assets in the region will face attacks. He mentioned US bases could come under fire and shipping routes like the Strait of Hormuz and Bab al-Mandeb might close. He also said that oil ports in the Red Sea would shut down. He warned of potential damage to US aircraft. Also Read: Call of Duty: Black Ops 6 Rivals Event: How to earn rewards? See start date, time, rewards and when is next scheduled event US Presidential Decision White House press secretary Karoline Leavitt spoke about the US stance. She said President Donald Trump will make a decision in the next two weeks. The decision will depend on possible future negotiations with Iran. Trump shared that there is a chance for talks, but no clear plan has been made yet. Live Events Oil Market Reacts to Conflict Oil prices have increased due to rising tensions. Israel and Iran have continued to exchange missile strikes. On Thursday, Brent crude futures rose by $1.60 to reach $78.29 a barrel. US West Texas Intermediate crude also rose to $78.34. Oil prices had already peaked at $78.50 on June 13 when Israel launched attacks. Also Read: Iran Israel Conflict: Does Israel have a nuclear arsenal? All you may want to know If Strait of Hormuz Closes The Strait of Hormuz handles about 20 percent of the world's oil supply. If the strait is closed, oil supply may drop. That could raise the cost of goods and fuel. Trade, shipping, and travel might also slow down. What is US War Powers Act? The US Constitution gives Congress the power to declare war, while the president is commander in chief. Presidents can respond to threats but need congressional approval for extended military action. A federal law limits presidential war powers, requiring Congress to be notified within 48 hours and consulted before troops are deployed, unless war is formally declared. FAQs Why is the Strait of Hormuz important? It carries 20 percent of global oil, so any disruption can affect prices and supply across the world. When will the US decide on involvement? President Trump is expected to decide within two weeks, based on whether talks with Iran may happen.
