Oman’s Foreign Minister Yusuf bin Alawi said at a Munich security conference, on February 16, that “a military confrontation is more likely to happen in the Strait of Hormuz than any other region in the Gulf, partially due to the increased number of military vessels.”

In recent months, military vessels from numerous countries have gathered in the Strait of Hormuz as a result of growing strains between Iran and the U.S. This January, eight European Union member-countries – Denmark, Belgium, France, Greece, Germany, Italy, Portugal, and the Netherlands – agreed to set up a new force to patrol the Strait of Hormuz. They aim to prevent seizures or sabotage of oil tankers by Iranian vessels.

Iran has threatened to stop the movement of ships and tankers along this narrow water passage numerous times in an effort to retaliate against the West, particularly the U.S. The threat level increased after the U.S. admitted that it assassinated powerful Iranian military commander, Qassem Soleimani, on January 7. However, the Iran-U.S. hostilities have eased since then.

Concerned about the hostility between Iran and the U.S., Oman has stepped up its traditional role of a regional diplomat to reduce the friction. It continues to maintain close contact with both countries. While Alawi downplayed an imminent military conflict in the Arabian Gulf region, he believed that a possible mistake due to heavy presence of international military vessels could inflame the tensions.

The Strait of Hormuz is one of the most important global chokepoints for transporting oil tankers out of the Arabian Gulf to the global market. Any potential compromise of the channel would seriously disrupt oil supplies.

The Strait of Hormuz is one of the most important global chokepoints for transporting oil tankers out of the Arabian Gulf to the global market. Any potential compromise of the channel, which is only 33 kilometers (21 miles) wide at its narrowest point, would seriously disrupt oil supplies – approximately 80 percent of oil shipped to Asia. Nearly 22.5 million barrels of oil per day moved through the Strait over the past two years, accounting for about 30 percent of oil being shipped across the oceans in that time period.

The entire global economy will suffer if the Strait is shut down. Oil prices will skyrocket around the world. This will trigger inflation, slow down economic growth, and increase prices of commodities manufactured from petroleum products as well as goods and services that are unrelated to oil—whether it is fruits from South America or furniture from Asia.

Oil producers in the Arabian Gulf, such as Saudi Arabia, Kuwait, Iraq, and the United Arab Emirates would lose billions in oil revenues, if they are unable to transport their crude through the waterway and sell it in the global market. A potential shutdown of the Strait for a prolonged period would cause a global economic recession.

While Iran and Oman have tried to change the legal status of the Strait by expanding their territorial waters and threatened to shut it down a number of times since the 1950s, they never acted on altering its legal status or posed a serious threat to the movement of ships and tankers that would jeopardize the global economy. Since the 1980s, there have been several occasions when the channel became a source of worries between regional and global powers, threatening the fate of the maritime chokepoint.

In 1984, Iraq’s President Saddam Hussein began attacking Iranian oil tankers during the war between the two countries. In a conflict known as the Tanker War, Iraq aimed to paralyze Iran’s economy by shutting down the chokepoint. Iran retaliated by attacking oil tankers of Iraqi allies, namely Saudi Arabia and Kuwait. It took an American naval intervention to protect the tankers and to make sure that the waterway remained open to shipping.

Between 2011 and 2012, Iran threatened to close the Strait in response to Western sanctions that targeted the development of its nuclear program. Iranian and American naval forces held military exercises in the Strait to assert their power. Iran claimed that it would be easy to block the Strait if its oil revenue was affected by the U.S.-led sanctions.

Tensions in the Strait of Hormuz increased after President Donald Trump withdrew from the Iran nuclear deal in 2018. The U.S. blamed a series of attacks on oil tankers and ships in May and June 2019 near the Strait on Iran, which denied its involvement. The June 2019 attacks on Norwegian and Japanese tankers caused a brief jump in oil prices.

The world held its breath that Iran would disturb the freedom of movement of ships in the Strait after the assassination of Qassem Soleimani in January.

The world held its breath that Iran would disturb the freedom of movement of ships in the Strait after the assassination of Qassem Soleimani in January. However, such fears have not materialized yet. Some Middle Eastern observers note that the lack of Iranian actions in the Strait so far is a calculated move not to disrupt its good relations with its only friendly neighbors in the Gulf region—Qatar and Oman, as they would suffer from the blockage of oil trade.

At this point, Iran is likely to lose more than gain by blocking the waterway. Given the boldness of the U.S. to kill one of Iran’s most powerful generals – Soleimani – and subsequent threats against Iran, Tehran fears that American retaliation for its possible shutdown of the Strait may be overwhelming and disproportionate and lead to a war.

Instead, the Iranian regime has more effective ways to take vengeful actions against the West through its numerous proxy wars in the region, whether through Iraq, Syria, or Lebanon.

Indeed, its immediate response to the killing of Soleimani was launching ballistic missile strikes on American troops housed in two bases in Iraq, which resulted in no casualties, but caused traumatic brain injuries among more than 100 members of the U.S. armed forces. After carrying out these attacks, Iran has been trying to de-escalate the frictions in the region, which was reciprocated by the Trump administration.

This does not mean that the Strait of Hormuz is out of danger. Iran keeps the option of targeting it open, as it always has. And Omani Foreign Minister Yusuf bin Alawi is right: the presence of many international military vessels in the Strait is likely to trigger a military conflict, potentially sparked by a mistake at a time of high tension. It would be ironic and tragic if the efforts of international military vessels to protect the Strait end up endangering the delicate peace.


US-Iranian Tensions Could Set the Stage for an Oil Price Storm