Strait of Hormuz remains closed reports suggest three vessels hit for noncompliance
Strait of Hormuz remains closed; reports suggest three vessels hit for non-compliance
TEHRAN – Iran has managed to impose a full blockade on the Strait of Hormuz since it first announced the closure of the waterway Sunday afternoon.
So far, Iran appears to have kept the strait closed without significant military engagement. Marine tracking platforms show that at least 200 vessels are now congested in surrounding waters, avoiding passage. Consequently, shipping costs have already surged by 1000%, prompting three of the world’s largest shipping companies to halt transit through the waterway.
Reports suggest the Islamic Revolution Guard Corps (IRGC) Navy has fired upon three vessels that did not heed orders, with footage online showing at least one tanker burning in flames.
The IRGC has not provided many details on how it is keeping the Hormuz Strait closed, as most vessels are abiding by the orders. However, the Iranian navy may have laid mines in the waterway, which would require weeks to clear if this tactic was employed.
Analysts trying to dissuade the U.S. and Israel from attacking Iran had warned that if the country acted on its threats and closed the Strait of Hormuz, the move would spell catastrophe for the world economy.
The Strait of Hormuz is the waterway through which roughly one-fifth of the world’s total petroleum liquids consumption passes, including crude oil and refined products. On average, about 20 to 22 million barrels of crude oil and other liquids transit this strait daily. A closure would immediately remove this volume from the global market and cause a massive spike in the price of crude oil, likely pushing it to unprecedented levels (potentially over $150 or $200 per barrel, depending on the severity and duration). Higher oil prices would then fuel cost-push inflation across every sector, including transportation, manufacturing, and agriculture. This would trigger a severe global economic downturn or depression, as energy costs become unsustainable for businesses and consumers worldwide.
The extent of the oil price increase so far will become clear when the major physical trading floors and banks open on Monday morning.
The surge in gas prices and inflation would be a major blow to U.S. President Donald Trump ahead of the mid-term elections in the United States, given that he had promised to “make America affordable again” when vying for a second time in the White House back in 2024.
source: tehrantimes.com