Iran’s renewed control over the Strait of Hormuz has triggered a global economic crisis, with oil prices surging and supply chains paralyzed. As of July 2026, the disruption has cost global businesses significant losses, forcing major firms to slash production and raise prices while energy markets brace for further volatility.
Escalating Energy Costs and Market Volatility
The strategic importance of the Strait of Hormuz—a transit point for approximately 20% of global petroleum and gas supplies—has once again become the focal point of geopolitical tension. According to analysis from Capital Economics, a prolonged closure could push Brent crude prices to $120 per barrel initially, with a worst-case scenario reaching $150. This surge threatens to transform a supply chain bottleneck into a widespread shock for production and transportation costs. Capital Economics further warned that natural gas prices in Europe could climb to 90 euros per megawatt-hour, compared to current levels of around 54 euros.
The International Monetary Fund (IMF) has warned that the global economy’s capacity to confront new disruptions is declining, noting that the “safety margin” that mitigated the impact of the initial conflict between the United States and Iran has become increasingly limited. In a post on its official website on Wednesday, the IMF explained that the impact of the conflict was lower than expected when it broke out in late February, thanks to increased supplies from some producers, the drawdown of oil stocks, and the ability of companies and households to shift to alternative energy sources. However, the IMF added that these factors are now beginning to erode, warning that any prolonged closure of the Strait of Hormuz may test the global markets’ ability to absorb the supply shortage.
Hashem Aqel, an expert in energy and oil affairs, stated during a phone intervention with Extra News on July 15, 2026, that Iran is using the strait as a direct strategic pressure card on the global economy. Aqel noted that the closure has caused “terrifying” economic losses, citing that the global economy has lost substantial wealth, while the Middle East region alone has lost significant funds, in addition to the loss of many jobs.
Corporate Financial Impact and Supply Chain Paralysis
The financial toll on the private sector is mounting rapidly. An updated analysis conducted by Reuters reveals that at least 279 major global companies have been forced to take emergency measures to mitigate the financial impact. These actions include raising prices of final products, reducing production rates, laying off part of the workforce, suspending cash dividends and share buyback operations, imposing additional fuel surcharges, and requesting emergency rescue packages from governments.
The International Energy Agency (IEA) has warned that the continued closure of the Strait of Hormuz for additional weeks will hit the global economy with harsh repercussions, particularly as markets currently suffer from a state of tension and severe uncertainty due to the renewed mutual U.S.-Iranian attacks.
Geopolitical Standoff Over Maritime Transit Rights
The current impasse stems from a fundamental disagreement over regional control. In an article published by The National Interest, geopolitical risk analyst Wasay Mir stated that recent attempts at de-escalation were merely temporary truces. Mir noted that the memorandum of understanding signed by U.S. President Donald Trump with Iran in Paris on June 17, 2026, lasted only three weeks. The core of the dispute remains, as Tehran believes closing the strait grants it the right to manage it and impose transit fees, while Washington insists it is a free international waterway,
making a permanent settlement elusive.
Broader Risks to Global Trade Corridors
The instability is not confined to the Persian Gulf. Developments this week revealed the expansion of conflict zones to the arteries through which energy, food, and technology move. According to three informed sources, Iran has asked the Houthis to prepare to close the Bab al-Mandab Strait if the United States targets the Iranian electrical grid. A source close to the militia stated that missiles and drones have been deployed near the strait in preparation for action. This threat gains weight from its timing, as Bab al-Mandab facilitates the passage of approximately 7% of global energy supplies, making any action there a direct extension of the pressure currently applied at Hormuz.
As the conflict continues, Iran has maintained a firm stance, with recent reports indicating the country’s position that oil exports must be for everyone or for no one. With maritime routes for energy and trade under pressure, the global economic situation remains in a state of high alert.
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