About 20% of the world’s oil passes through the Strait of Hormuz.
China is Iran’s biggest oil customer and maintains friendly relations with the Islamic Republic.
Iran’s foreign minister warned earlier Sunday that the Islamic Republic “reserves all options to defend its sovereignty,” after the U.S. bombed three key nuclear sites over the weekend.
Iranian state-owned media, meanwhile, reported that Iran’s parliament backed closing the Strait of Hormuz, citing a senior lawmaker. However, the final decision to close the strait lies with Iran’s national security council, according to the report.
An attempt to block the narrow waterway between Iran and Oman could have profound consequences for the global economy. Some 20 million barrels per day of crude oil, or 20% of global consumption, flowed through the strait in 2024, according to the Energy Information Administration.
Oil prices could shoot above $100 per barrel if the strait is closed for a prolonged period, according to Goldman Sachs and consulting firm Rapidan Energy. JPMorgan analysts view the risk of Iran closing Hormuz as low because the U.S. would view such a move as a declaration of war.
Source: www.cnbc.com
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