What A US Naval Blockade Of Iran Means For Oil Flows; Which Importers Are Most Affected?

The US military announced it would block shipping traffic in and out of Iran's ports starting at 10 a.m. ET (1400 GMT) on Monday. This move would prevent roughly two million barrels of Iranian oil per day from entering the world's markets, further tightening global supply.

What Was Announced?

After weekend peace talks in Islamabad between negotiators from the US and Iran ended without a deal, President Donald Trump said the US Navy "will begin the process of blockading any and all ships trying to enter, or leave, the Strait of Hormuz. "The US military's Central Command clarified that the blockade would only apply to ships going to or from Iran, including all Iranian ports on the Gulf and Gulf of Oman. US forces would not impede freedom of navigation for vessels transiting the Strait of Hormuz to and from non-Iranian ports. Additional information would be provided. Iran's Revolutionary Guards warned that military vessels approaching the strait would be considered a ceasefire breach and would be dealt with harshly and decisively.

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Retired Admiral Gary Roughead, a former chief of US naval operations, cautioned that Iran could fire on ships in the Gulf or attack infrastructure of Gulf states that host US forces.

Implications for Oil Flows

Blocking Iranian shipments would disconnect a significant source of oil from the world's markets. Iran exported 1.84 million barrels per day (bpd) of crude in March and has shipped 1.71 million bpd thus far in April, compared with a full-year average of 1.68 million bpd in 2025, according to Kpler data. However, a surge in Iranian output before the war started on February 28 has led to near-record levels of Iranian oil loaded on ships, with more than 180 million barrels floating as of earlier this month, according to Kpler data.

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What About Oil Flows from Other Gulf Producers?

Shipping traffic through the Strait of Hormuz, which has been severely curtailed by an Iranian blockade since the start of the war, remains nearly halted despite last week's two-week ceasefire agreement between Washington and Tehran. Oil tankers were steering clear of the strait on Monday. On Sunday, two Pakistan-flagged tankers, Shalamar and Khairpur, entered the Gulf to load cargoes from the United Arab Emirates and Kuwait. A third ship, the Liberia-flagged very large crude carrier (VLCC) Mombasa B, also transited the strait earlier on Sunday and was ballasting in the Gulf. Another VLCC, the Malta-flagged Agios Fanourios I, which tried to pass through the strait on Sunday to load Iraqi crude destined for Vietnam, turned back and was anchored near the Gulf of Oman.On Saturday, three fully loaded supertankers passed through the Strait of Hormuz in what appeared to be the first vessels to exit the Gulf since the US-Iran ceasefire deal. Some 187 laden tankers carrying 172 million barrels of crude oil and refined products were inside the Gulf as of last Tuesday, according to Kpler.

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Which Importers Are Most Affected?

Before the war, most Iranian oil exports were shipped to China, the top global crude importer. Last month, the US unveiled a sanctions waiver that has enabled other buyers, including India, to import Iranian oil. India is set to receive its first crude shipment from Iran in seven years this week, according to ship tracking data from LSEG and Kpler. Before the war, roughly 20% of global oil and natural gas exports were shipped through the Strait of Hormuz, with most cargoes headed to Asia, the largest importing region. This blockade adds significant risk and uncertainty to global oil markets, as any escalation could further disrupt flows from other major Gulf producers (Saudi Arabia, UAE, Kuwait, Iraq, etc.). Even if non-Iranian traffic is officially allowed, fear of Iranian retaliation or incidents in the strait could keep tanker traffic low, keeping oil prices elevated in the near term.

(Note: Except for the headline, this article has not been edited by The Daily Jagran and has been published through a syndicated feed. Source - REUTERS)