Iranian Parliament Votes to Block Strait of Hormuz
"Final Decision Lies with Supreme National Security Council"
BE and JP Morgan: "Oil Prices Could Surpass $130 per Barrel"
On June 22 (local time), the Iranian parliament decided to block the Strait of Hormuz in response to the previous day's U.S. airstrikes on three major nuclear facilities within the country. If the worst-case scenario of blocking the Strait of Hormuz?one of the Middle East's main oil transport routes?becomes reality, analysts predict that international oil prices, currently in the mid-$70 range, could soar as high as $130 per barrel.
According to a report by Iran's state-run Press TV, Esmail Kowsari, chairman of the Iranian parliament's National Security Committee, stated, "The final decision lies with the Supreme National Security Council (SNSC)."
The Strait of Hormuz is a key oil transport route in the Middle East. The strait is shallow, the passage for large oil tankers is limited, and most vessels must pass through Iranian territorial waters, effectively giving Iran control over the strait. Since about one-fifth of the world's daily oil supply passes through this area, experts believe that an actual blockade would inevitably lead to a sharp rise in oil prices.
Bloomberg Economics (BE) projected that if Iran actually blocks the Strait of Hormuz, international oil prices could surpass $130 per barrel. JP Morgan and Oxford Economics also analyzed that in this scenario, oil prices could reach $130 per barrel.
Oxford Economics stated, "In the most severe case, international oil prices could surge to $130 per barrel, and the U.S. year-end inflation rate could reach 6%."
However, there are skeptical views in the United States regarding the possibility of Iran blocking the Strait of Hormuz.
U.S. Vice President JD Vance, in an interview with NBC News that morning, said that Iran's blockade of the Strait of Hormuz would be "suicidal," downplaying the likelihood. He said, "Their entire economy runs through the Strait of Hormuz. If they want to destroy their own economy and cause chaos in the world, that would be their decision, but I don't think that choice makes any sense."
In the past, during the Iran-Iraq War in the 1980s, Iran attempted to temporarily restrict passage through the Strait of Hormuz by attacking opposing oil tankers and merchant ships and laying mines, but has never carried out a full blockade.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
