The Indicator from Planet Money Will Iran block the Strait of Hormuz?
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Jun 24, 2025 Tensions are rising around the Strait of Hormuz, a crucial chokepoint for global oil transport. The podcast discusses the potential repercussions if Iran were to close it off, impacting international oil supply and prices. The strategic importance of this maritime route is explored, along with how the insurance industry might reflect and predict geopolitical risks in the region. Experts provide insights into regional stability and the critical need for maintaining open sea routes amid these escalating tensions.
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Strait of Hormuz's Global Importance
- The Strait of Hormuz is a critical chokepoint with roughly a quarter of the world's seaborne oil and a fifth of LNG passing through it.
- Its narrowness and proximity to Iran gives that country potential leverage over global energy supplies.
No Real Alternative Routes
- There are no alternative routes for oil from many Middle Eastern countries except the Strait of Hormuz.
- While pipelines exist to bypass it, most oil and gas still leave the Persian Gulf via shipping through the strait.
Iran-Iraq War Shipping Disruptions
- During the Iran-Iraq war, attacks on shipping in the Strait of Hormuz caused a 25% drop in ship volume.
- This historical example shows how conflict can disrupt oil trade without fully closing the strait.