The U.S.-Israel attacks on Iran and the subsequent Iranian retaliatory strikes have triggered a de facto closure of the Strait of Hormuz—a critical global oil chokepoint in the Gulf region. In a new insight, Director of Energy and Environmental Policy Shuting Pomerleau reviews Iran’s oil and gas exports capabilities, the strategic significance of the Iran-controlled Strait of Hormuz, and the potential impact on global and U.S. energy markets.

Key points:

• The Strait of Hormuz sees 20 percent of global petroleum consumption (about 20 million barrels per day) flowing from major oil producing countries in the Gulf region to the rest of the world.
• The ultimate impact on global energy markets hinges on the duration and scope of the conflict: If the disruptions in the Strait of Hormuz escalate to a prolonged blockade, the resulting supply void will pose a serious threat to global energy supply and economies.
• For the United States, there is significant uncertainty ahead with the geopolitical volatility and domestic energy affordability challenges.

Read the analysis.