Finshots Daily Why Iran can’t shut down the Strait of Hormuz
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Jun 27, 2025 Explore the strategic significance of the Strait of Hormuz, a critical lifeline for global oil and LNG transport. Discover how Iran's political maneuvers could impact major economies and reverberate through energy markets. The podcast highlights the delicate balance between geopolitical tensions and financial implications, revealing why closing this vital waterway could lead to economic chaos. Tune in to understand the intricate ties between international politics and your investment portfolio!
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Strait of Hormuz's Crucial Role
- The Strait of Hormuz is crucial as nearly 20% of the world's oil passes through it daily.
- However, Iran depends heavily on this route, making a complete shutdown unlikely.
Oil Route Alternatives Exist
- Saudi Arabia and UAE have pipelines bypassing the Strait of Hormuz for oil exports.
- These alternatives reduce the impact if the Strait were closed.
Disruption Over Closure
- The real threat in the Strait of Hormuz is not closure but soft disruptions raising costs.
- These disruptions increase freight, insurance, and logistical expenses silently impacting economies.