DAISHIN SECURITIES projected on the 16th that the blockade of the Hormuz Strait by Iran would be unattainable. Although Iran has threatened to blockade the Hormuz Strait several times in the past, there has been no direct attempt. Given that most of Iran's trade is conducted via maritime routes, concerns about undermining the political standing of conservatives are noted as one of the reasons making the blockade difficult.
Earlier, the Israeli military dropped over 330 bombs targeting Iran's nuclear and missile program facilities, military command posts, residences of high-ranking officials, residences of scientists, and missile launch sites. In response, Iran launched hundreds of missiles aimed at Tel Aviv and Jerusalem on the afternoon before, escalating military conflict.
As a result, concerns about the possibility of a blockade of the Hormuz Strait by Iran are growing. Choi Jin-young, a researcher at DAISHIN SECURITIES, explained, "As military conflicts escalate and Iran's domestic and international situation worsens, the worst-case scenario has begun to emerge."
He said, "A blockade of the Hormuz Strait could recreate the first oil shock or the Iran-Iraq War," adding, "The Hormuz Strait, located to the south of Iran, connects the Persian Gulf and the Gulf of Oman, and about 20% of the world's crude oil and LNG maritime trade passes through it."
He also noted that "if the relevant waters are blocked by Iran, the only alternative facilities would be in Saudi Arabia and the UAE, while transport disruptions for Iraq, Kuwait, and Qatar would be inevitable," and added, "If the crude oil export, which accounts for at least 7-10% of global supply, is restricted, prices could potentially hit $85 per barrel immediately."
However, the researcher, Choi, believes that a blockade of the Hormuz Strait by Iran would be difficult to implement. He analyzed, "The fact that 85% of energy transport through the Hormuz Strait is directed towards Asia means it could provoke backlash from allies like Iraq and Qatar and major customer China," adding, "Iran is also a member of the innocent passage right, which guarantees freedom of navigation as long as there are no issues with peace and safety."
He continued, "It is true that political issues are difficult to predict, but this illustrates that a blockade of the Hormuz Strait is nearly absurd," and stated, "While prices will immediately reflect geopolitical risks, once it is confirmed that a blockade is difficult, stability is expected to be regained based on supply impacts."