Concerns have emerged regarding the potential disruption of shipping in the Strait of Hormuz following the recent U.S. attack on significant Iranian nuclear sites. The U.S. military dropped 30,000-pound bunker-buster bombs on a mountain near Iran’s Fordow nuclear facility, prompting Iran to vow a defensive response.
So far, Iran has not acted on its threats to retaliate against the U.S. by targeting military bases or attempting to obstruct global oil supplies. Goldman Sachs provided an analysis indicating that prediction markets suggest a 52% probability of Iran closing the Strait of Hormuz by 2025, despite the limited liquidity in these markets.
They pointed out that both the U.S. and China have strong economic incentives to prevent major disruptions of this crucial shipping lane. The Strait of Hormuz is a vital corridor for global oil shipments, with nearly a quarter of them passing through these narrow waters shared by Iran, Oman, and the United Arab Emirates.
Iran’s Supreme National Security Council has the final say on any decision regarding the closure of the Strait, and reports indicate that parliament has shown support for such a measure following the U.S. bombings. Neil Roberts, head of marine and aviation at the Lloyd’s Market Association, suggested that the U.S. actions increase the risk of attacks by Iranian forces or their allies, like the Houthis.
He noted that the decrease in Western shipping presence in the Red Sea could increase the likelihood of targeting in the Strait of Hormuz. However, most observers believe that Iran will limit its actions in the strait due to the significant reliance of multiple countries on this crucial shipping route.
As of mid-June, marine market sources reported that war risk premiums for the Persian Gulf were approximately 0.2%.