I. Introduction: the conflagration
After the bombing ordered by Donald Trump, President of the United States of America, against nuclear facilities in Iran, that country's Parliament approved the closure of the Strait of Hormuz, according to local media. The measure still needs to pass through the Supreme National Security Council and Ayatollah Khamenei to take effect. If implemented, the blockade would interrupt the flow of roughly 30% of all oil traded globally.
The economic and geopolitical effects of this measure cannot be predicted with precision, but it is possible to sketch out some possible scenarios. This study is divided into two chapters: the first considers the potential economic effects in isolation, and the second addresses the potential associated geopolitical effects.
II. Potential economic effects
Based on historical supply-and-demand dynamics and market analyses (EIA, IEA, Goldman Sachs, Rystad Energy), scenarios are drawn up for the impact on the price of Brent crude oil depending on the duration of the Strait of Hormuz closure.
Assumptions considered: global spare capacity of ~2.1 million barrels/day (Saudi Arabia and the United Arab Emirates); strategic reserves (SPR) of 350 million barrels in the U.S. and 1.5 billion barrels in the OECD; alternative routes via the Bab-el-Mandeb Strait or pipelines such as Petroline (capacity of 5 million barrels/day); global demand of 103.5 million barrels/day in 2025; reference price of US$78.74/barrel on 6/22/2025.
| Duration of closure | Peak price (Brent) | Global economic impact |
|---|---|---|
| Up to 7 days | US$90–105 | Moderate energy inflation (+0.5% in global CPI), technical recession in net importers (India, Turkey) |
| 8–30 days | US$110–130 | 5–7% rise in industrial commodities, risk of stagflation in the EU and Asia |
| 31–60 days | US$140–160 | Global recession (1.5–2% drop in world GDP), currency collapse in importers (Turkey, Pakistan) |
| +60 days | US$180–220+ | Economic depression, hyperinflation in emerging economies, global food crisis |
Critical adjustment factors: a military reopening of the strait (5th Fleet) could limit the closure to under 15 days, containing prices at US$95–110; full use of the SPR (1 million barrels/day for 90 days) would reduce peaks by 15–20%; the Petroline pipeline could divert 5 million barrels/day, but would operate at its technical limit (+US$5/barrel in cost); and prices sustained above US$120 tend to cut global demand by 3–4 million barrels/day through energy substitution and recession.
Estimated probabilities: closure under 15 days, 65% (rapid military response and diplomatic pressure); closure of 15 to 60 days, 25% (regional escalation involving the Houthis/Hezbollah); closure exceeding 60 days, 10% (catastrophic scenario of direct U.S.–Iran confrontation).
A closure exceeding 30 days would trigger an unprecedented energy crisis not seen since 1973, with systemic effects on the global economy. Spare capacity and strategic reserves are critical buffers, but insufficient for prolonged shocks.
III. The global chessboard under the shadow of Hormuz
Iran's closure of the Strait of Hormuz is not an isolated act — it is the first domino in a sequence of decisions that redefine alliances, economies and the balance of power. For the U.S., the issue is preserving petrodollar hegemony and avoiding an election-year recession. For Russia and China, it is an opportunity to fracture NATO and accelerate de-dollarization. For Iran, it is an existential move — turning its main point of vulnerability, the naval blockade, into a strategic weapon.
| Actor | Form of intervention | Probability | Critical trigger |
|---|---|---|---|
| Russia | Military supply (missiles, drones), "volunteers" in the Gulf, naval exercises in the Indian Ocean | 75–80% | Western strike on Iranian nuclear facilities |
| China | Diplomatic pressure at the UN, naval exercises with Iran, acceleration of yuan-denominated deals | 60–70% | Blockade of a Chinese tanker or attack on the base in Gwadar |
| Saudi Arabia | Emergency production increase (via Petroline), logistical support to the 5th Fleet, cyberattacks against Iran | 90–95% | Effective closure of the strait for over 72h |
| UAE/Qatar | Permission to use air bases, activation of alternative pipelines | 100% | Saudi decision |
Three combined price scenarios (Brent)
1. Base scenario — localized conflict (65% chance). Participation limited to Iran vs. the U.S./Arab allies; peak price of US$130/barrel; duration under 30 days; Russia and China limit themselves to diplomatic rhetoric.
2. Regional escalation scenario (25% chance). Iran, proxies (Houthis/Hezbollah) and Russian supply; attacks on Saudi platforms and Russian missiles in the Gulf; peak price of US$160–180/barrel; duration of 60 to 90 days.
3. Systemic war scenario (10% chance). Iran–Russia–China–Turkey alliance against NATO/GCC; tipping point at a possible Chinese attack on the U.S. naval base at Diego Garcia; peak price above US$250/barrel; collapse mechanisms including a blockade of the Strait of Malacca and a Russian embargo on hydrocarbons.
| Variable | Base scenario | Regional escalation | Systemic war |
|---|---|---|---|
| Global growth | −1.0% (2025) | −3.2% (broad recession) | −5.0%+ (depression) |
| Energy inflation | +15% (CPI) | +35% (hyperinflation in emerging markets) | +70% (supply-chain collapse) |
| Financial risk | Flight to Treasuries | Emerging-market collapse | Sovereign defaults (Italy, Argentina) |
Decisive dynamics: China may push for payments in yuan, destabilizing the dollar, with an estimated 40% probability if the war exceeds 60 days; Russia may resort to hybrid warfare (cyberattacks and disinformation); and Saudi Arabia's maximum emergency production capacity — 11.5 million barrels/day — is insufficient to offset the 17 million barrels potentially blocked at Hormuz.
IV. Strategic rationale by actor
A detailed strategic rationale for each key actor's decision-making, based on national interests, cost-benefit analysis and geopolitical dynamics.
Iran
Interests: regime survival, lifting of economic sanctions, consolidation of regional influence. In favor of closure is the country's only effective asymmetric weapon — holding roughly 20% of global oil hostage; against it, the risk of regime fragmentation in the face of sanctions and a Western attack. Most likely decision: a limited closure, of 7 to 15 days, to force negotiations without full-scale war.
United States
Interests: global energy stability, containment of Iranian expansion, and avoiding an economic crisis in a pre-election period. The options at play — military strike, diplomacy, or SPR release combined with sanctions — carry distinct costs and benefits. Tolerance thresholds: Brent above US$120 tends to trigger an automatic military response; interference with allied tankers would be treated as a casus belli.
Russia
Opportunities: selling oil at premium prices (+US$20/barrel), draining U.S. military resources and positioning itself as a global mediator. Main risk: total diplomatic isolation. Most likely entry point via untraceable military supplies, "volunteers" and cyber warfare.
China
Tipping point: Brent sustained above US$130 would trigger a Chinese recession. Red line: blockade of a Chinese tanker would require an immediate military response. Dual strategy — publicly, advocating a diplomatic solution; privately, supplying itself via strategic stockpiles and Russian purchases.
Saudi Arabia
Dilemma between maintaining the U.S. alliance, avoiding regional war and protecting oil infrastructure. Direct intervention conditional on full air-defense guarantees from the U.S.; emergency production viable up to 11.5 million barrels/day, above which there is a risk of reserve depletion.
European Union
Germany and France tend to release strategic reserves without direct military involvement; Mediterranean countries tend to offer logistical support to the U.S. 6th Fleet without direct exposure to attacks.
"Iran will play its Hormuz card up to the threshold of full-scale war, but will retreat if it obtains economic relief. The U.S. will intervene militarily only with an explicit Arab coalition. Russia will exploit the chaos without direct confrontation, while China undermines the petrodollar in the shadows. Saudi Arabia will be the true kingmaker — its alignment will determine the depth of the crisis."
V. Toward a friendly exit
Strategic recommendations for each actor, designed to contain global escalation while preserving vital interests.
United States — calculated containment: tactical suspension of new airstrikes for the first 72 hours, with diplomacy via Oman; release of 500,000 barrels/day from the SPR combined with pressure on Saudi Arabia to activate spare capacity, aiming to stabilize Brent at up to US$100; and an offer of an air-defense guarantee to the GCC in exchange for reopening the Petroline pipeline.
Iran — an honorable exit: symbolic management of the strait, allowing "neutral" tankers to pass subject to Iranian inspection; a concrete trade of a humanitarian corridor for LNG in exchange for asset unfreezing and temporary suspension of sanctions; and acceptance of mediation under Russian/Chinese auspices, not the EU's or the U.S.'s.
Russia — profitable intermediary: role as "technical guarantor" to Iran, limited to territorial protection; commitment not to cut OPEC+ production during the crisis; and activation of alternative routes via the Caspian pipeline.
China — pragmatic stabilizer: yuan swap line to Iran conditional on priority passage for Chinese tankers through the strait; proposal for a multilateral conference on energy security; and acceleration of the CPEC logistics corridor for overland imports.
Saudi Arabia — regional leadership: raising production to its technical maximum; funding a joint naval force to patrol the Bab-el-Mandeb Strait; and opening the IPSA pipeline to Iraqis and Kurds.
European Union — responsible mediator: direct diplomatic bridge with Tehran; activation of a European energy-stabilization mechanism; and immediate diversification via spot contracts with Algeria and Azerbaijan.
Last line of defense identified in the study: if within 96 hours Brent exceeds US$120, it is recommended that the IMF activate an emergency credit line of around US$100 billion for net importers (India, Turkey, South Africa), avoiding systemic collapse.