In response to the U.S. military strikes, Iran is threatening to cut off shipping from the Strait of Hormuz, which is an artery through which 15 million barrels of crude oil per day and 4 million barrels of refined petroleum products, such as diesel, flow. Whether or not it can pull a full blockade off is doubtful, but the conflict has already managed to greatly disrupt exports moving through the strait. This, according to Wood MacKenzie, represents 15% of the global oil supply flows.
Robert Rapier, a chemical engineer and editor-in-chief of Shale Magazine, told Just the News that the Gulf region is also a major supplier of nitrogen fertilizer, and those supplies will be difficult to get out as a result of shipping halts. Approximately half of the world’s crops depend on nitrogen fertilizers, and one-fourth of the world’s supply comes from the Middle East.
With diesel prices rising, and nitrogen fertilizer shipments disrupted, the conflict may threaten global food supplies and drive up costs.
Near a worst-case scenario
The situation in Iran has driven up the West Texas Intermediate price of crude — the U.S. benchmark — to more than $70 per barrel Monday, according to OilPrice.com. Gasoline prices in the U.S. on Monday were up by $0.10 over where they were a week ago, according to GasBuddy.
“This is near a worst-case scenario, with Iran being involved in military conflict, because of the Strait of Hormuz. The only thing worse would be if Iran and Saudi Arabia start fighting,” Rapier said.
David Blackmon, an analyst with more than 40 years of experience in the oil and gas industry and author of the “Energy Absurdities” Substack, told Just the News that Iran lacks any capability of forming a real blockade at the strait. But it can fire missiles at tanker traffic shipping through the chokepoint and endanger the shipping lane.
Shipping through the strait was effectively halted on Sunday, when the world’s largest maritime mutuals withdrew insurance covering war risk, Bloomberg News reported. The decision will likely discourage shipowners from risking their vessels and cargo in the Strait of Hormuz until the conflict is resolved, or new premiums are negotiated.
This won’t have as large of an impact on the U.S. Most of our oil is imported from Canada. About 444,000 barrels per day come from Saudi Arabia. The country has alternative routes, but Iran may be able to prevent some of those from getting shipped to the U.S.
Especially bad news for China
The larger impact is on China and Iran itself. All of Iran’s oil moves through the strait, and much of it goes to China. Asian markets opened Monday with a modest 7.5% jump, and the Brent price of crude oil — the European benchmark — was at $77.53 Monday afternoon. “I’ve been gratified by the fact that traders didn’t just go crazy when the markets opened in Asia,” Blackmon said.
Blackmon also said this shows there’s no real blockade at the strait. Also, China has considerable reserves at onshore inventories, as well as Iranian tankers at sea to keep its energy needs met for now. Likewise, the global market was oversupplied by 2 million barrels per day before hostilities in Iran began.
“So there’s a cushion,” Blackmon said.
An infographic titled “Strait of Hormuz” created in Ankara, Turkiye on March 2, 2026.
