KEY INSIGHTS
The Strait of Hormuz remains a key maritime chokepoint, with approximately 20 percent of global crude oil and oil products transiting the Strait. Limited or temporary disruptions, including recent Iranian military exercises simulating partial closure of the Strait, demonstrate how rapidly regional tensions can translate into potential conflict escalations, global energy price spikes, shipping risk, and supply chain instability.
KEY EVENTS
February 17, 2026: Iran unilaterally closed the north lane of the Strait of Hormuz for several hours to conduct Islamic Revolutionary Guard Corp (IRGC) naval drills named “Smart Control of the Strait of Hormuz.”
April 27, 2023: Iran seized a Marshall Islands-flagged Chevron-chartered tanker, Advantage Sweet, prior to it exiting the Persian Gulf through the Strait of Hormuz.
July 5, 2018: Iran threatened to close the Strait of Hormuz in retaliation for U.S. sanctions placed on Iranian oil exports.
ANALYSIS
The global energy market remains structurally exposed to disruptions in the Strait of Hormuz. The Strait connects the Persian Gulf to the Gulf of Oman and the Arabian Sea. The Strait facilitates the transit of approximately 17 to 20 million barrels of crude oil and petroleum products per day, representing 20 percent of global consumption.
The Strait’s vulnerability has been demonstrated previously over the past four decades. During the Iran-Iraq War, both Iran and Iraq targeted civilian oil tankers in the “Tanker War.” Despite sustained hostilities, the Strait remained open, although navigation was limited due to offensive missile strikes and the presence of mines.
In January 2026, Iran conducted major naval exercises in and around the Strait of Hormuz, amid escalating tensions with the U.S. and Israel. The closure of the northern TSS marked an exceptional step and signaled a higher degree of escalatory willingness. We assess Iran is unlikely to sustain a prolonged closure of the Strait in the face of U.S. and allied naval power. Iran views the Strait as a strategic deterrent lever, intended primarily to signal resolve and raise the economic costs of external pressure.
OUTLOOK
Concentric assesses tensions between the United States and Iran are likely to remain elevated in the near to medium term which could impact the Strait of Hormuz. While a prolonged, total closure is unlikely in the absence of major interstate conflict, the probability of episodic disruptions, including vessel seizures, harassment, or military signaling exercises, remains moderate. Organizations with supply chains dependent on Gulf energy exports should conduct scenario-based planning for temporary disruptions lasting from several days to several weeks.
Authored by: Alex Edwards
