Strait of Hormuz: How US blockade on Iranian ports will affect the global economy

For weeks now, the world economy has been on tenterhooks, waiting for one outcome: reopening the Strait of Hormuz.

In response to war with Israel and the United States, Iran has effectively closed the narrow waterway, through which about a fifth of the world’s oil and gas normally passes.

Some ships have passed through the strait during the war, but largely on Iran’s terms, including by reportedly paying tolls for safe passage.

Opening the strait back up to all shipping traffic was a key condition of the two-week ceasefire agreed to last week. But after “marathon” talks between the US and Iran failed to result in a deal on the weekend, US President Donald Trump used a Truth Social post to announce a major escalation: “Effective immediately, the United States Navy, the Finest in the World, will begin the process of BLOCKADING any and all Ships trying to enter, or leave, the Strait of Hormuz.”

US Central Command later confirmed a blockade on all Iranian ports would begin on April 13 at 10am eastern time in the US.

The idea is to put severe pressure on the Iranian economy by restricting its exports, and force the country to allow all shipping through. But Iran – a major exporter of oil and gas – warned the global economy would pay.

So, under...

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