Oil, gas and Iran economic analyst
Tehran’s frequently invoked threat of closing the Strait of Hormuz may be far easier to signal than to carry out, not least because it would harm allied China more than the hostile West.
For now, the threat is muted as Iran and the United States have returned to the negotiating table. But the shadow of war has not lifted.
Hardline and influential voices in both capitals continue to push a confrontational line, and the presence of the US aircraft carrier Abraham Lincoln near Iranian waters is a reminder of how quickly tensions could escalate.
Earlier this week, units from the Islamic Revolutionary Guard Corps approached and boarded a commercial vessel flying a US flag in the strait, while a US F-35 fighter jet shot down an Iranian drone that had approached the carrier strike group.
On the same day, amid a diplomatic scramble across the region to keep talks alive, hardline lawmakers in Tehran publicly revived calls to close the strait.
Yet the economic constraints on any serious disruption are severe.
The China factor
According to data from commodities intelligence provider Kpler seen by Iran International, nearly 95 percent of Iran’s crude oil exports in 2025 were loaded at Kharg Island and shipped through the Strait of Hormuz, primarily to China.
Estimates from the US Energy Information Administration show that roughly 20 million barrels per day of crude oil and petroleum products—about one-fifth of global consumption—pass through the strait each day.
Only about 6 percent of that volume is destined for Europe and the United States. Asian buyers dominate, absorbing 84 percent of oil and petroleum products transiting Hormuz, as well as more than 80 percent of liquefied natural gas shipments.
China alone imports around 5 million barrels of oil per day via the route. Any sustained disruption would therefore strike directly at Beijing’s energy security.
That vulnerability has grown in recent months as Venezuelan oil exports to China have effectively halted following stepped-up US enforcement. Venezuela exported about 850,000 barrels per day in January—volumes sufficient to replace most of the oil consumed in Europe and the United States that transits Hormuz.
Reuters reported that the United States last month reclaimed its position as the largest individual destination for Venezuelan crude, receiving about 284,000 barrels per day.
China, by contrast, has stepped back. PetroChina recently halted purchases of Venezuelan crude, signaling that Beijing no longer expects access to discounted supplies once available under sanctions-era arrangements.
A narrowing margin
With sanctions also complicating imports from Russia and Iran, China’s reliance on Persian Gulf oil—and on uninterrupted traffic through Hormuz—is set to deepen further.
From a Western perspective, these shifts have quietly altered the risk calculus. While any disruption in Hormuz would still push global oil prices higher, Europe and the United States are now better positioned than in the past to absorb short-term shocks. China is not.
For Iran, the costs would be higher still. Roughly 80 percent of its foreign trade, oil and non-oil alike, moves through ports along the Persian Gulf. Closing Hormuz would not only jeopardize China’s energy supplies but effectively paralyze Iran’s own external commerce.
There is also a broader cushion in the system. The International Energy Agency estimates that global spare production capacity will remain near 4 million barrels per day through 2026, helping to limit the impact of any temporary disruption.
All of this helps explain why Iran’s recurring threats to close the Strait of Hormuz—raised repeatedly over more than two decades—have never been carried out.
While Iran’s foreign minister is right now visiting Oman for bilateral talks with the United States, in Tehran’s calculus, negotiations now promise steady erosion. War, by contrast, offers a chance – however risky – to reset the balance.
This marks a shift from the Islamic Republic’s long-standing view of war as an existential threat. Today, senior decision-makers appear to believe that controlled confrontation may preserve the system in ways diplomacy no longer can.
That belief explains why war is no longer unthinkable in Tehran, but increasingly framed as a viable instrument of rule.
At the core of this shift lies a stark assessment: the negotiating table has become a losing field.
This is not because an agreement with Washington is impossible. It is because the framework imposed by the United States and its allies has turned diplomacy into a process of cumulative concession.
When nuclear limits, missile restrictions, regional influence, and even domestic conduct are treated as interlinked files, Iranian leaders see talks not as pressure relief, but as strategic retreat without credible guarantees of survival.
From Tehran’s perspective, diplomacy no longer buys time. It entrenches vulnerability.
In that context, confrontation begins to look less like recklessness and more like a way out of a narrowing corridor.
War as a domestic instrument of control
Why war? Because war is the one scenario in which the Islamic Republic believes it does not necessarily lose.
Domestically, the regime faces its most severe legitimacy crisis in decades.
Widespread repression, the killing of protesters, economic collapse, and a society increasingly resistant to fear-based governance have eroded the state’s traditional tools of control.
Under these conditions, war serves a powerful political function. It rewrites the rules of governance.
In wartime, dissent can be reframed as collaboration with the enemy. Protest becomes sabotage. Opposition becomes a national security threat.
Emergency logic compresses public space and legitimizes measures that would provoke backlash in peacetime.
For the Islamic Republic, war is not primarily imagined as a catastrophe imposed from outside. It is a mechanism that restores hierarchy, discipline, and fear at home.
This logic is not unique to Iran, but it has taken on renewed urgency as the Islamic Republic confronts a society it can no longer reliably intimidate into submission.
Externally, Tehran’s calculations rest on another assumption – that the United States wants to avoid a prolonged war.
The experiences of Afghanistan and Iraq, combined with Washington’s cautious posture toward the war in Ukraine, have reinforced the belief that the US lacks the political appetite for a long, grinding conflict.
From Tehran’s vantage point, even a military strike would likely be limited.
Airstrikes, cyber operations, or narrowly defined attacks are forms of pressure the Islamic Republic believes it can absorb.
This feeds into a core element of Iran’s survival doctrine: without foreign ground forces, the system is not collapsible.
Military action that stops short of sustained ground involvement is therefore seen as manageable.
More than that, Iranian leaders believe escalation can be shaped by exporting costs across the region.
By threatening US allies and regional partners, Tehran calculates that a drawn-out confrontation would quickly become politically and economically unattractive for Washington.
In this reading, a limited war could push human rights concerns off the global agenda, expose divisions among Western allies, unsettle energy markets, and ultimately force a return to narrower negotiations.
This strategy, however, rests on a dangerous assumption: control.
Wars that begin with expectations of containment rarely remain contained.
In a volatile and heavily armed region, escalation chains are hard to manage, and actions Tehran defines as deterrence may be read in Washington as crossing red lines.
Still, the trajectory is clear.
The Islamic Republic has concluded that it loses at the negotiating table, but may endure – or even regain leverage – in sustained tension.
That belief explains why war is no longer treated as a last resort, but increasingly as a calculated, if perilous, component of its survival strategy.
