In the midst of rising conflicts in the Middle East, a senior member of Iran’s Islamic Revolutionary Guard Corps has proclaimed the Strait of Hormuz closed and threatened to set fire to any ship attempting to cross, sharply raising concerns of a worldwide energy shock.
In response to the Israeli and US bombing campaign that started on Saturday and killed Iranian Supreme Leader Ayatollah Ali Khamenei and other senior officials, Tehran is threatening to weaponize one of the most important maritime chokepoints in the world. The warning was issued as oil and gas markets trembled.
IRGC has threatened to “burn those ships ablaze.”
In remarks reported by Iranian official media, Ebrahim Jabari, a top advisor to the head of the Islamic Revolutionary Guard Corps, made the sobering statement.
“The strait is closed.” He declared on Monday that “the heroes of the Revolutionary Guard and the regular navy will set those ships ablaze if anyone tries to cross.”
Approximately one-fifth of the world’s oil supply passes through the Strait of Hormuz, which separates Iran and Oman. Commodity markets and diplomatic channels both tremble at the mere prospect of their shutdown.
Jabari went one step farther and described an offensive of boundless energy. Additionally, we will target oil pipelines and prevent any oil from leaving the area. In a post on the IRGC’s Telegram channel, he predicted that the price of oil would hit $200 in the next few days.
“The Americans, with debts of thousands of billions of dollars, are depending on the region’s oil, but they should know that not even a drop of oil will reach them,” he continued.
As gas prices rise, energy markets falter
The growing risks and reported disruptions caused energy prices to respond quickly. After QatarEnergy halted the production of liquefied natural gas due to attacks on its facilities, natural gas prices increased by almost 50% in Europe and nearly 40% in Asia.
Drones targeted Saudi Arabia’s Ras Tanura oil refinery, which can handle over 500,000 barrels of petroleum per day, earlier in the day, a military spokesperson told the Saudi Press Agency. According to reports, air defenses stopped the approaching aircraft.
Concerns about the stability of global supply chains have increased due to the combined effects of tanker disruptions, refinery threats, and possible pipeline assaults. Analysts caution that credible attacks on regional infrastructure or a prolonged blockage of Hormuz might drive crude prices beyond the $200 mark mentioned by Jabari, levels never seen in contemporary energy markets.
At the center of the world’s oil flows is a strategic chokepoint
It has long been believed that the Strait of Hormuz is the most strategically important maritime route in the globe. Its narrow waters handle almost 20% of the world’s daily oil consumption, making it essential to the economies of both Asia and Europe.
A complete blockade would have far-reaching effects beyond of the Gulf, increasing inflationary pressures and making monetary policy more difficult for big countries already struggling with geopolitical unpredictability.
The US promises action to stop the price shock
Washington made it clear that it will act swiftly to mitigate the economic consequences. According to Secretary of State Marco Rubio, the US expected market volatility and would take steps to lessen its effects.
“We will begin implementing those phases tomorrow in an effort to lessen that… We thought this may be a problem,” Rubio stated.
