Hormuz Strait's 20 Million Barrels Daily Passage: Restricted Navigation Threatens to Prolong War

The oil passage through the Strait of Hormuz is wavering between complete blockade and normal operations, emerging as a variable that could determine the duration of the Iran war and the flow of international oil prices. If even a portion of the oil can escape, the short-term supply shock may be delayed, but there are analyses suggesting that Iran's negotiating leverage could weaken, increasing the pressure for heightened tensions.

According to a report by Dan Alamariu, chief geopolitical strategist at Alpine Macro, cited by Forbes on the 24th of Korean time, "If oil passes through Hormuz, the likelihood of the war continuing deep into 2027 increases." This is not a confirmed forecast but rather a scenario presented by a single analyst.

The issue is not a binary of whether the strait is open or closed. The key is how much oil and petroleum products are actually moving. According to the U.S. Energy Information Administration (EIA), an average of 21 million barrels passed through the Strait of Hormuz daily in 2022. The International Energy Agency (IEA) noted that the average passage volume is expected to be 20 million barrels per day by 2025.

The Strait of Hormuz is a maritime passage connecting the Persian Gulf and the Gulf of Oman. The oil and petroleum products, as well as liquefied natural gas from Gulf oil-producing countries such as Saudi Arabia, Iraq, Kuwait, Qatar, and the United Arab Emirates, rely on this route. While Saudi Arabia and the UAE have some alternative routes, many assessments suggest that it is difficult to completely replace disruptions in the strait.

This issue is not distant for Korean readers either. The EIA explained that 82% of the oil and condensate that passed through Hormuz in 2022 and the first half of 2023 headed towards the Asian market, with China, India, Japan, and Korea being the main destinations. Disruptions in Hormuz could lead to fluctuations in domestic prices and financial markets through the flow of Middle Eastern energy.

Reuters reported that on the 19th of Korean time, U.S. President Donald Trump stated on Truth Social that "the Strait of Hormuz is open and operational." In the same report, the Iranian negotiating representative claimed that the strait should remain closed until the U.S. meets the conditions of the temporary agreement from June. Both sides sent opposing messages regarding the same strait.

Ship tracking data is also not straightforward. Reuters reported, based on Kpler data, that at some points over the weekend of the 17th, navigation significantly decreased, and some vessels turned off their Automatic Identification System (AIS) or utilized routes along the coast of Oman. Such dark transits and maritime transshipments complicate actual volume estimates.

The market has already reacted to the tension. On the 20th, Reuters reported that Brent crude for October rose to $94.42 per barrel, marking a three-week high. Concerns over the war stalemate and disruptions in Middle Eastern supply were cited as reasons for the price increase.

Iran has also signaled that it will not back down. AP reported that on the 24th of Korean time, Mohsen Rezaei, the head of Iran's Supreme National Security Council, warned that countries supporting new U.S. economic measures would be viewed as engaging in "acts of war." A newly formed Iranian body related to the strait also mentioned the possibility of restricting the passage of some vessels in the future.

This flow connects to previous reports by our publication that addressed the impact of disruptions in Hormuz on Iran's growth rate and energy pathways. However, the focus of this issue is not whether there is a complete blockade but rather to what extent restricted navigation is maintained. If oil continues to move, the market buys time, but Iran has incentives to consider stronger pressure tactics.

Earlier reports from our publication also confirmed a scenario where declarations of full normalization of the Strait of Hormuz and restricted navigation were mentioned simultaneously. President Trump stated that the strait is open, but reports explained that maritime pressures have also increased amid ongoing tensions between the U.S. and Iran.

Alamariu, in the report cited by Forbes, noted that if Hormuz is not completely closed, Iran's leverage weakens. At the same time, such conditions could increase the possibility of further actions by Iran. This outlook holds significance when oil price levels, passage volumes, the intensity of sanctions, and the resumption of negotiations move in tandem.

The connection to the risk asset market is also indirect. There is no definitive basis to determine the direct price direction, but oil prices and geopolitical tensions can influence inflation expectations, interest rate trajectories, dollar liquidity, and risk asset preferences. Risk assets, including Bitcoin (BTC), have been sensitive to changes in these macro variables.

Currently, three confirmed facts exist: Hormuz remains a key bottleneck in global energy flows, the U.S. and Iran describe the state of the strait differently, and there is a gap between ship tracking data and official statements. As messages continue between the U.S. and Iran regarding new sanctions, the volume of passage and oil price reactions will be the next points of confirmation.