The 39km-wide stretch of water threatening to throw the global economy into turmoil
Oil prices are surging following the United States' and Israel's attacks on Iran, but not because of Tehran's status as a significant fuel producer.
Instead, it's because of the Islamic Republic's control over the Strait of Hormuz, one of the world's most important strategic waterways.
This is what you need to know about it.
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The narrow Strait of Hormuz is a crucial shipping thoroughfare. AP
What is the Strait of Hormuz?
The Strait of Hormuz is the only waterway in or out of the Persian Gulf.
Passing between Iran and Oman, it's more than 150km long but at its narrowest just 39km wide.
Why is it so important for oil prices?
Despite its size, the Strait of Hormuz facilitates an enormous proportion of the oil trade.
About 20 per cent of global supply – some 15 million barrels a day – goes through the passage, as it's the only maritime route for the oil-rich Gulf states such as Qatar, Bahrain, Kuwait, Saudi Arabia and the UAE to get their shipments out to the rest of the planet.
The area has now gone from thoroughfare to bottleneck, though.
Shipping companies including Danish firm Maersk, the world's largest, have indefinitely suspended crossings of the Strait, insurers won't back any voyages through the area, and that was all before Iran's Revolutionary Guard (IRGC) threatened to fire on any vessels passing through.
"No one is wanting to navigate it, and there's no insurer who's willing to stand behind any transport going through there right now," said Tom Goldsby, logistics chairman in the Supply Chain Management Department at the University of Tennessee.
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An Islamic Guard ship circles a British-flagged opiloil tanker in 2019. The IRGC has threatened to fire on any ships passing through the Strait of Hormuz. AP
All up, there's about 200 various tankers either stranded in the Persian Gulf or waiting just outside, according to analytics firm Kplr.
"Those ships that got stuck in the Gulf are not going anywhere," Goldsby said.
"There's also a whole host of ships that were heading into the Gulf to replace them, and of course they're anchored or going elsewhere now."
Although eight members of the OPEC+ cartel announced an increase of oil production on Sunday, much of that is elementary; with the Strait of Hormuz closed, extra barrels from Saudi Arabia, Iraq, the United Arab Emirates and Kuwait won't easily find their way onto the global market.
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On top of that, if supply from Iran dries up it may add to price pressures.
Most of the Islamic Republic's supply of 1.6 million barrels a day go to China and, to a lesser extent, India.
"Since oil is a global, fungible commodity, a disruption anywhere affects prices everywhere," Clayton Seigle, a senior fellow at the Centre for Strategic and International Relations, a Washington, DC-based think tank, wrote in a recent research note.
"A loss of Iranian barrels would cause China to bid for substitute supplies," Seigle said.
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This satellite image provided by Vantor shows damage after a drone attack at Saudi Arabia's Ras Tanura oil refinery. Satellite image ©2026 Vantor via AP
How high will oil prices go?
On Monday, crude oil prices jumped 6.2 per cent to $US77 a barrel – similar to the 6 per cent jump seen last month when Iran temporarily shut down parts of the strait for what it said was a military drill – however they've since risen again.
As of 6am today, the international benchmark brent crude has been hovering around $US81.
Analysts, though, have warned that figure could hit triple digits should this conflict drag out into a protracted, lengthy war.
"If we start to see additional direct attacks against energy infrastructure, not just in Saudi Arabia and Kuwait, but in other countries in the region, then that's when the market will start to think about a push toward $US90 and perhaps even beyond," Torbjorn Soltvedt, principal Middle East analyst at risk intelligence company Verisk Maplecroft, said.
However, other analysts have predicted a retreat to around $US65 to $US70 a barrel after a near-term spike.
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The strikes on Iran have set off jitters in global energy markets. AP
"The key question for the global economy is obvious: will the Strait of Hormuz be effectively closed for oil and gas exports for more than a few weeks?" Berenberg chief economist Holger Schmieding said.
"If so, it would hurt global growth and raise global inflation noticeably.
"But I would expect Trump to go to great lengths to prevent a lasting surge in energy prices that could hurt him at home ahead of the US midterm elections in November."
Australian motorists can expect to pay an extra 1 cent per litre of fuel for every dollar the price of crude oil rises, according to research by AMP.
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Is it only oil that is impacted?
No.
Just as the Persian Gulf is a major source of the world's oil supplies, it's also home to huge natural gas (LNG) reserves, which are also traded through the Strait of Hormuz.
With much of the continent's supply already cut off due to Russia's invasion of Ukraine, European gas futures contracts skyrocketed by 38 per cent, while prices rose 3 per cent in the US.
Qatar is a major supplier for Europe, but its state-run energy company has paused LNG production after an Iranian attack on one of its facilities.
– with Associated Press, CNN
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