June 17, 2025 – Istanbul
Prepared by: Berna Kanbay
Chief Advisor to the President, ASAD & ASAV
INTRODUCTION:
The Strait of Hormuz stands as an indispensable geopolitical artery for global energy security and the continuity of world trade. Unlike the Suez and Panama Canals, Hormuz has no viable alternative; this situation places the Strait at the very heart of the international system’s fragile balance. It is pertinent to recall Abraham Lincoln’s wisdom: “Do I not destroy my enemies when I make them my friends?” In this context, it is evident that a strategic passage like the Strait of Hormuz should serve as a platform for cooperation, not conflict.
This strategic position has naturally become the focal point for geopolitical tensions and international relations in the region. Lacking an alternative sea route for oil transportation, and thus described as a “vulnerable lifeline,” the preservation of navigation freedom in the Strait of Hormuz is a priority for global actors. Connecting the Persian Gulf to the Gulf of Oman, and facilitating the passage of approximately 20% of the world’s oil, the Strait is a veritable fulcrum for the global economy and energy security. Its status under international maritime law is upheld by the United Nations Convention on the Law of the Sea (UNCLOS) regulations, which guarantee the right of transit passage. Although the United States is not a party to UNCLOS, it largely adheres to its principles in practice. Being officially party to the convention would further strengthen the legal basis for the transit rights of its naval forces and support the maritime security expectations of its allies.
This analysis series focuses on far-reaching cascading scenarios in the event of a Hormuz closure, spanning from Brent crude prices to petrodollar flows, international trade, national tax revenues, potential political shifts, likely new collaborations, and the economic balances of nations. In a scenario of closure, an increase in hybrid warfare elements, such as cyberattacks targeting commercial infrastructure or energy systems, is also among the foreseen risks. In this context, attention must be drawn to why alternative corridors such as Türkiye’s TANAP, TAP, TurkStream, Eastern Mediterranean LNG projects, and the Iraq-Türkiye pipeline need to be rapidly strengthened. It must be emphasized that international support for Türkiye in this regard would benefit all peoples of the world.
Establishing a cause-and-effect relationship makes it easy to understand that fluctuations in the production and distribution roles of fossil fuels will automatically lead to volatility in energy and food prices, given that energy is consumed in the production of all our food, beverages, and other goods. For example, the price of beef consumed in Vietnam is directly influenced by the costs of producing the fertilizer used for the corn feed the cattle consume, the processing, storage, and distribution of that feed, and changes in freight prices during the import of that fertilizer, for instance, from Argentina to Vietnam. Furthermore, disruptions in logistical routes from Argentina to Vietnam would result in a complete blockage of this supply chain. The direct impact of natural gas, a raw material for nitrogen-based fertilizers derived from ammonia, on the security of the food chain should also be assessed within this scope. This is why the crisis will not be limited to points where energy security is at risk but will trigger a global security, energy, food, and diplomatic crisis. It would not be surprising for actors who intentionally pave the way for such a global crisis, whose effects could last for years, to be isolated from the international community.
Upon examining the immediate vicinity of the Strait of Hormuz, it is evident that secure military bases and energy and industrial facilities, which are strategic for the entire world, are not located far from the Strait. This fact indicates that it would not be possible for global actors to abandon the Strait of Hormuz to its own devices. On the other hand, within the framework of international maritime law, international passages like the Strait of Hormuz are subject to a “transit passage” regime. This regime guarantees the right of unhindered passage for all vessels, including warships. In this context, as explained further in our analysis, the importance of “Energy Supply” for the world is no less than what “the Strait of Hormuz” represents for Iran. Therefore, in the event of a Hormuz closure, it is foreseen that cascading crises would compel all governments to resort to economic sanctions rather than new investments, and the populations of various countries could suffer for the same reason.
I. THE GEOPOLITICAL STRUCTURE OF THE HORMUZ STRAIT
The Strait of Hormuz is a gateway through which oil and natural gas-rich countries such as Iran, Saudi Arabia, UAE, Qatar, Kuwait, and Iraq access world markets. Iran, situated on the Strait’s northern coast, holds a geographical advantage. For Iran, the Strait is a crucial component of both its defense strategy and a potential deterrent. A review of recent history reveals that the threat of closing the Strait has been a tool Iran occasionally employs as leverage in international negotiations.
Recalling the rule in card games that “even the worst hand can become a nightmare for the opponent if played correctly,” it is clear that closing the Strait of Hormuz would be a game-breaking move. This is because a Hormuz closure would also pose an extremely significant problem for Iran’s own oil exports.
Gulf Cooperation Council (GCC) countries (Saudi Arabia, UAE, Kuwait, Qatar, Bahrain) are entirely dependent on the Strait of Hormuz for their oil and natural gas exports. A closure of the Strait would deliver a direct and devastating blow to their economies. For this reason, Gulf countries support regional stability and navigation security. Global Energy Consumers (China, Japan, India, South Korea, European countries, and other Asian countries) purchase approximately 70% of the oil transiting the Strait of Hormuz. Europe is a significant market for LNG arriving via Hormuz. These countries would be severely impacted by the adverse effects on global energy prices and supply disruptions caused by a Strait closure. In other words, a closure of the Strait would directly affect not only regional countries but also major consumer countries like China, Japan, India, the European Union, and the United States in terms of energy supply security. For these reasons, the security of the Strait of Hormuz is a prerequisite for international peace and prosperity, and the Strait holds a special position in terms of maritime law and diplomacy.
In this context, as of 2025, Israeli attacks on Iranian territory have re-escalated tensions over the Strait of Hormuz; Iran’s strong retaliations have deepened regional instability. These developments, occurring just before the nuclear negotiations between the U.S. and Iran, have once again demonstrated how susceptible energy transit routes are to military risks. While Iraq is not yet directly intended to be involved in the center of this tension, it faces the risk of becoming a conflict zone again through militia groups and proxy forces. The presence of armed groups close to Iran on Iraqi soil increases the likelihood of a conflict around Hormuz spilling over into Iraq. When considering the potential subsequent scenarios, in the event of a possible Iranian move to close the Strait of Hormuz, U.S. bases in Iraq could become targets. This carries the risk of pushing Iraq to a breaking point not only in terms of energy but also military logistics.
II. CROSS-BORDER RAMIFICATIONS OF PROXY WARS
In the event of Iran closing Hormuz, one of the most severely affected countries would be Iraq. This is because Iraq has developed a significant dependence on Iran through economic and energy ties. Iraq, which imports electricity and natural gas from Iran, also has logistical mobility in economic border crossings with Iran. The restriction of these crossings would directly impact Iraq’s internal economic balances, thereby affecting the KRG (Kurdistan Regional Government) as well. Speculations regarding the use of KRG territory in Israeli operations against Iran have rendered the Kurdistan Regional Government vulnerable to potential Iranian reactions. This situation carries the risk of multi-front instability, similar to how third parties became conflict zones in the 1991 Gulf War.
In recent years, the geography of the Kurdistan Regional Government (KRG) in Iraq has emerged as an extremely pivotal area where strategic interactions of regional and international actors are concentrated. Within this framework, it is noted that certain regionally supported groups have periodically conducted actions targeting some international military elements within KRG borders, which has shifted the region’s geopolitical position to a more delicate equilibrium. The attack on K-1 Base near Kirkuk in late 2019, which resulted in the loss of an international civilian contractor’s life, demonstrated how such interactions can heighten regional sensitivities. This chain of developments is part of a multi-dimensional process extending to a critical incident on January 3, 2020. Similarly, rocket and unmanned aerial vehicle (UAV) attacks on Erbil’s Harir Air Base in 2021 and 2023 reveal the continued propensity of regional actors to utilize asymmetric capabilities to convey strategic messages. It is observed that these actions, claimed by entities such as the “Islamic Resistance in Iraq,” aim both to influence the KRG’s internal security dynamics and to keep international presences in the region under constant scrutiny. In this context, the KRG is subjected to strategic pressure not only due to the presence of certain Kurdish opposition groups, but also because this geographical area is periodically used as a zone of indirect contact. The persistence of such on-the-ground dynamics could further sharpen the existing balances in Iraq’s internal politics. Indeed, such interactions occurring before Iraq’s general elections, scheduled for November 2025, bear the potential to deeply affect not only voter behavior but also Iraq’s foreign policy maneuvering capability.
III. BRENT CRUDE OIL
The security of energy supply is directly related not only to the production of petroleum fuels but also to their export capacity, in other words, the security of logistics. Fluctuations in Brent crude oil prices have the direct ability to touch the nerve endings of the global economy. When considered in the context of the Israel-Iran tension, the impact of oil passing through the Strait of Hormuz on Brent prices becomes even more pronounced. A renewed tightening of sanctions against Iran and the withdrawal of Iranian oil from the market will create not only a physical supply shortage but also psychological market pressure. In this context, given Iran’s dependence on energy exports, closing Hormuz would be a devastating step for its own economy. It is clear that the closure of Hormuz would serve no rational global benefit. However, it is understood that for the Iranian regime, this step is seen as a strategic card, especially for redirecting internal pressures outwards.
IV. HOW WOULD THE GLOBAL ECONOMY BE AFFECTED IF HORMUZ CLOSES?
A complete blockage of transit in the Strait of Hormuz is expected to push Brent prices into the 120-150 USD/barrel range. As a continuation of this scenario, there will be risks of up to a 20% increase in freight costs, disruptions in logistics chains, increased costs in industrial production, and a contraction in global trade. Costs will rise in all logistics and energy-dependent sectors, and developing countries will struggle with foreign exchange pressure and increased import costs. Global inflation will rise, trade volume will shrink, growth rates will fall, and the risk of global recession will strengthen. The scenario of the closure of the Strait of Hormuz, one of the pillars supporting the global system, will, due to its geopolitical consequences, simultaneously pressure not only energy flows but all parameters of the international security architecture. There is no utility function that can rationalize a risk of this scale on the basis of strategic interest; therefore, the closure of Hormuz is a mathematically negative fixed equation for global actors. For this reason, the crises triggered by a Hormuz closure will paralyze the investment environment, forcing states to produce sanctions rather than new investments. This chain reaction will affect not only governments but also societies in different geographies, leading to a decline in global quality of life.
V. TÜRKİYE’S DIPLOMATIC APPROACH IN LINE WITH INTERNATIONAL LAW
Türkiye has consistently maintained a transparent, peaceful, and law-abiding transit regime through the Istanbul and Çanakkale Straits. This practice, guaranteed by the Montreux Convention, strengthens the Republic of Türkiye’s position as a reliable actor in international trade. Iran’s strategic use of the threat to close this vital passage, even in matters not directly concerning the Strait of Hormuz, highlights the importance of using deterrence with a sense of responsibility in energy geopolitics. In contrast, Türkiye has always built a fair, accountable, and internationally legally compliant diplomacy regarding maritime passages; in this respect, it has positioned itself as not only a geographical but also a normative safe haven in energy supply security.
Türkiye’s energy arteries, formed by its TANAP, TAP, TurkStream, and Eastern Mediterranean LNG projects, serve as a strategic lifeline not only for Türkiye but also for the global system in scenarios such as a possible closure of the Strait of Hormuz. In this context, these infrastructure projects, supported by Türkiye’s diplomatic stability and engineering capacity, function as a stability multiplier in ensuring the continuity of energy supply. Promoting Türkiye’s role in this regard within the international community will contribute to the prosperity not merely of a single state but of all humanity.
The modernization of the Iraq-Türkiye Oil Pipeline (ITP) could enable the regaining of approximately 1 million barrels per day capacity. The expansion of Ceyhan Terminal’s LNG processing capabilities could contribute up to an ambitious yet achievable projection of 8% to Europe’s natural gas supply. Integrated LNG hubs to be established in the Eastern Mediterranean could create a new route for Egyptian and Israeli gas to Europe. The transformation of the Turkish Republic of Northern Cyprus (TRNC) ports represents not merely a geographical but a strategic leap.
Rationality lies in the integration of these investments with diplomacy. At this point, the modernization of the Iraq-Türkiye pipeline, the expansion of Ceyhan LNG capacities, and the establishment of energy hubs in the Eastern Mediterranean are extremely vital for the energy supply security of the entire world. The transformation of TRNC ports into logistical bases is a diplomatic vision and a strategy that will support regional peace. It is beneficial for the global recognition of Türkiye’s ingenuity in producing alternatives for energy supply security, establishing it as a reliable haven for the entire world.
VI. INTERNATIONAL LAW PERSPECTIVE
In the event of a Hormuz closure, the UN Security Council and international legal mechanisms are expected to activate diplomatic and legal avenues to protect freedom of navigation. Countries with high engineering and diplomatic capabilities, such as Türkiye, are expected to be the cornerstones of this process through law-based peaceful solutions and cooperation models. The assumption that states party to maritime law would hesitate in protecting transit passage freedom and ensuring the sustainability of maritime trade routes is invalid, both practically and fundamentally.
This is because these states are the maintainers of the normative order created by the UNCLOS regime and the systemic guarantors of the freedom of the seas; contrary behavior would directly produce a threat to their own maritime jurisdictions. The United Nations Convention on the Law of the Sea (UNCLOS) has guaranteed the right of unhindered passage and the transit passage regime through straits like Hormuz. Therefore, when the continuity of maritime trade is threatened as a natural consequence of the violation of navigation freedom, it is expected to result in the activation of international legal intervention mechanisms. Such a scenario would necessitate the UN Security Council’s diplomatic initiatives and international cooperation aimed at ensuring the security of maritime trade.
As Türkiye has always done, adopting a high-level diplomatic position that multi-dimensionally analyzes the rising geopolitical turbulence around Hormuz and Iran’s asymmetric expansion strategy carried out through proxy actors in the Iraqi theater, will offer a structural contribution to the regional peace architecture. Within this framework, an institutionalized security cooperation mechanism between Iraq and Türkiye will not only reinforce border security but will also function as a preventive strategic barrier neutralizing all external proxy cards. Türkiye’s active role in security diplomacy, beyond energy diplomacy, represents a multi-vector intervention capacity that can rebalance regional and global equations.
VII. GLOBAL POWER BALANCES AND ALLIANCES
A potential closure of the Strait of Hormuz will force a re-coding of not only energy routes but also the strategic reflexes of regional actors. Many different actors, including oil-exporting and importing countries, Western nations, Gulf countries, Iraq, and even Israel, will feel the need to recalibrate their positions.
In such a high-tension crisis environment, the potential interactions of Tehran’s policies, conducted through regional proxy actors, risk further complicating the existing situation. However, upon careful examination of on-the-ground developments and international dynamics, structural changes in this approach are being observed: The periodically weakening operational capabilities of some groups in Lebanon, certain restrictions on Iran in Syria, and the Houthi movement in Yemen facing increasing international scrutiny and isolation, indicate that this regional engagement model may no longer be able to generate the same comprehensive environmental support and strategic leverage effect as before. This situation calls into question the potential of any regional pressure mechanism Iran might contemplate deploying via the Strait of Hormuz to achieve its expected strategic benefits.
In this context, the failure of Tehran’s regional engagements to yield anticipated results and the potential weakening of the so-called “Shia Crescent” sphere of influence are likely to exert significant pressure on Iran’s domestic politics and regional strategies. The accumulation of such external factors and economic hardships could reshape not only regional power balances but also global actors’ policies towards Iran. The combination of ongoing internal and external challenges could limit Tehran’s strategic options, potentially leading to notable changes in the country’s future trajectory.
On the other hand, the possibility of Iran closing the Strait of Hormuz is expected to function as a trigger for the formation of new balances. Energy supply crises create new alliances. In this context, Gulf countries, major energy consumers in Asia, and Western countries can be expected to increase their energy security-focused collaborations. International organizations may develop new mechanisms for maritime trade security. This process holds significant opportunities for Türkiye to solidify its role as an energy hub and a diplomatic bridge.
VIII. ENERGY LOGISTICS AND HORMUZ
Another critical topic, as important as energy security, is energy logistics. The cessation of tanker traffic through the Strait of Hormuz would paralyze not only oil flows but also LNG transportation. Notably, the vast majority of Qatar’s LNG exports pass through this Strait. A Hormuz closure would cause deep disruptions in the global LNG market, leading to consequences such as supply bottlenecks in Europe during the winter months. Türkiye’s vision for TANAP, TAP, TurkStream, and Eastern Mediterranean LNG terminals carries not merely national but international strategic value at this juncture. The logistical continuity of these projects would reduce dependence on single choke points like Hormuz and contribute to a multi-centric understanding of energy security.
CONCLUSION:
A closure of the Strait of Hormuz would constitute a stress test not just for energy markets, but for the fundamental architecture of free trade, diplomacy, and security that underpins the international system. All these variables indicate that Iran’s intended regional pressure mechanism via Hormuz may not yield the expected leverage effect.
In this scenario, Türkiye, by integrating its strategic pipelines, its international standing in the legal sphere, and its diplomatic acumen, emerges not merely as an energy hub, but as a responsible actor within the global system and a reliable haven for the entire world. Türkiye’s capacity for constructive action, diplomacy, and engineering capabilities demonstrates that it is one of the few actors capable of transforming this crisis scenario into an opportunity.
It is evident that a scenario profoundly disrupting global energy supply security, such as the closure of the Strait of Hormuz, and the escalating tensions between Iran and Israel, would further deepen the impacts of existing Iranian embargoes on global energy markets. Such geopolitical uncertainties triggering global energy bottlenecks make the search for alternative routes and reliable suppliers vital. In this strategic context, Türkiye’s potential to diversify regional and international collaborations is of critical importance. For example, the entry into force of energy transit security agreements with Romania and Bulgaria in the Black Sea would both contribute to regional stability and strengthen the potential for an alternative energy corridor to the West. Similarly, establishing LNG cooperation with non-Greek actors in the Eastern Mediterranean (e.g., Lebanon, Egypt) would enable the diversification of energy sources in the region, increasing resilience against geopolitical risks. Organizing bilateral energy security forums with major energy-consuming countries in Asia (South Korea, Japan, India) would elevate Türkiye to a more central position in the global energy market, concretizing long-term and rational energy gains. Furthermore, engineering forums organized for the logistical integration of the TurkStream, TANAP, and TAP pipelines would maximize Türkiye’s energy transit capacity by increasing the efficiency of existing infrastructure.
Such technical and diplomatic collaborations would elevate Türkiye beyond merely a network of pipelines and transit points, transforming it into a key enabler of regional stability and global energy security. Türkiye’s consistently demonstrated proactive and balancing approaches will provide concrete rational benefits in minimizing geopolitical risks and strengthening international energy cooperation.