Iran's Red Button: Will It Cut Off 26% of the World's Oil?

The war between Israel and Iran is not a distant conflict. It has an economic "red button" that could directly affect your wallet: the Strait of Hormuz. Iran's threat to close this vital artery of global oil is already shaking the markets.

Amid the thunder of missiles and drones, Iran's most potent threat may not be military, but economic. Tehran has put its most powerful deterrent weapon on the table: the possible closure of the Strait of Hormuz, a narrow maritime passage that is, without exaggeration, the jugular of the global economy.

Approximately 26% of all the world's oil consumption passes through this corridor, just 33 kilometers long at its narrowest point, along with a massive amount of liquefied natural gas. Any disruption to this flow would have immediate and catastrophic consequences for energy prices and the global economy.

How serious is the threat from Iran?

The threat is not mere boasting. A senior Iranian legislator, Ali Yazdikhah, declared that if the United States intervenes militarily in support of Israel, it is "Iran's legitimate right... to disrupt the ease of transit of its oil trade" as a pressure measure.

Iran cannot "close" the Strait like a door, but it has the potential to make it too dangerous for commercial shipping. Its strategy would be based on:

* Mine Warfare: Deploy naval mines to make passage impassable. * Coastal Strikes: Use your arsenal of anti-ship missiles from the coast.

* Harassment: Using the Revolutionary Guard's speedboats to attack or capture oil tankers.

The credibility of this threat is supported by past actions. Iran has a history of harassing and seizing commercial vessels in the region, demonstrating both its ability and willingness to use the Strait as a tool of geopolitical pressure.

The Immediate Effect: Panic in the Markets

Financial markets, which hate uncertainty, have already reacted nervously. Immediately after the United States entered the conflict and the rhetoric hardened, it was observed:

* Oil Price Rise: The price of Brent crude, the international standard, jumped 4.4% to $76.45 per barrel. U.S. crude rose 4.3%. This increase directly translates into higher gasoline prices at pumps around the world.

* Stock Markets Drop: Wall Street reacted negatively. The S&P 500, an important indicator of market health, fell 0.8%.

Although prices showed a slight lull amid rumors of possible diplomatic efforts, volatility is extreme. Every new headline, every statement, has the power to trigger sharp swings, demonstrating how fragile the current economic stability is.

The Economic Pulse of the Conflict:

Daily Impact | Date (Sample) | Key Conflict Event | Oil Price (Brent Crude) | S&P 500 (Close) ||—|—|—|—|| Day 1 | Israel begins airstrikes in Iran. | Rises to $73.50 (+2.1%) | Falls to 6,050 (-0.5%) || Day 5 | Trump warns Iran on social media. | Rises to $74.80 (+1.8%) | Falls to 6,010 (-0.7%) || Day 8 | US bombs nuclear sites. | Jumps to $76.45 (+4.4%) | Falls to 5,982 (-0.8%) || Day 9 | Rumors of European diplomacy. | Falls to $77.20 (-2.5% from peak) | Mixed, S&P 500 -0.2% |

Note: Illustrative table based on reported data.

Beyond Oil: The Domino Effect

The crisis is not limited to energy. The global economic uncertainty created by the conflict has a domino effect affecting companies across all sectors. For example, shares of the global consulting firm Accenture (ACN) fell nearly 7% after the company reported that businesses are postponing major investment projects due to the uncertain economic outlook.

Iran is using the globalized economy as a weapon. By threatening the Strait of Hormuz, it is not only challenging the United States but also holding hostage the economic stability of the entire world, including Washington's allies in Europe and Asia, which are highly dependent on that oil.

The war in the Middle East is no longer a distant news story. Its consequences are already being felt in the markets, and if the threat over the Strait of Hormuz materializes, the impact on gasoline prices and the cost of living will be direct and severe for millions of people.