Has the Strait of Hormuz Ever Been Blocked - and What Happened?

The Strait of Hormuz has never been shut. Not once.

But oil markets don't wait for that.

Even the hint of trouble sends prices jumping.

Roughly 20% of the world's oil moves through that narrow corridor. A 21-mile-wide bottleneck that controls the flow of global energy. If it were ever blocked, the shock would be instant.

And everyone knows it.

That's why, for decades, the threat alone has been enough.

In the 1980s, the Iran-Iraq War turned into a naval minefield. Tankers were attacked. Mines bobbed in shipping lanes. The U.S. Navy stepped in. Kuwaiti oil tankers were reflagged and escorted through Hormuz.

Still open. But never calm.

Brent crude traded with a consistent premium - up $6 to $12 during peak tension. Not because the oil stopped. Because it might.

Then came 2008.

Iranian speedboats darted at U.S. destroyers in the strait. Just posturing. But that's all it took.

Brent cracked $100 for the first time ever. A few months later, it surged to $147. Supply was tight. Demand was high. But Hormuz tension added fuel to the fire.

Markets didn't blink. They jumped.

In 2012, things escalated again. Iran warned it would shut the strait if sanctions hit harder. The West didn't back down.

Traders reacted fast.

Brent spiked from $107 to $111 overnight. WTI jumped $3.40 to break $102. By March, Brent had surged past $125.

Nothing was blocked. Not a single ship. But the fear was priced in.

2018 brought more noise.

President Rouhani said if Iran couldn't sell oil, no one in the region would. Iran's navy launched exercises near the strait.

Brent popped 3% in a single day. Just off a headline.

The pattern held in 2019. Two tankers were hit near the Gulf of Oman. Then Iran seized the Stena Impero, a British-flagged vessel, right in Hormuz.

Markets didn't need a press release.

Brent soared over 5% immediately. But it didn't last. Traders had seen this movie before.

No full blockade. No extended stoppage. The oil still flowed. And the spike faded.

But the playbook remained the same.

Threats. Sabotage. Seizures. Drills.

Markets react fast. Reprice risk. Then settle - until the next scare.

That's the Strait of Hormuz story. Still open. Still tense. Always one headline away from sparking global oil panic.

It doesn't need to close.

It just needs to look like it might.

Filed under: General Knowledge