In a major breakthrough to the temporary ceasefire amid ongoing Iran and US-Israel war, Iran has announced on Friday evening the opening of Strait of Hormuz. In a social media post Iran’s foreign minister Abbas Araghchi said “In line with the ceasefire in Lebanon, the passage for all commercial vessels through Strait of Hormuz is declared completely open for the remaining period of ceasefire, on the coordinated route as already announced by Ports and Maritime Organisation of the Islamic Rep. of Iran”.

The situation now shifts to how the United States responds and whether it continues with its counter-blockade aimed at choking Iran’s oil exports. The US naval move has already disrupted shipments through the Strait of Hormuz, a route that carries nearly 20% of the world’s oil supply, making it a critical global chokepoint. China, the largest buyer of Iranian crude, remains central to this unfolding equation, with India, Japan and South Korea also heavily dependent on energy flows through the Strait. In fact, a major share of oil passing through Hormuz is destined for Asian economies, leaving them highly vulnerable to prolonged disruptions. Despite Iran reopening the passage during the ceasefire, uncertainty persists. Washington’s next move will be crucial in determining whether tensions ease or escalate further. If the blockade continues, it could once again squeeze Iran’s economy while also triggering fresh volatility in global oil markets, directly impacting major Asian importers and the wider world economy.

This US–Israeli conflict with Iran is not just another small military clash. It shows a bigger change in how the world works today. Earlier, people believed that such conflicts could be controlled through diplomacy or by staying neutral. But this situation proves that it’s not so simple anymore. From the very beginning, it became clear that the old ways of handling tensions are not working. Today’s world is highly connected — what happens in one region can quickly affect many others. When Iran carried out strikes in the early days, it didn’t limit itself to one place. It hit targets linked to the US in different countries and also attacked important oil and energy facilities in the Gulf. Because of this, global markets reacted immediately. In simple terms, even a regional conflict can now turn into a global problem very quickly.

The Strait of Hormuz is one of the world’s most critical energy chokepoints, with Gulf nations facing severe vulnerability if shipping is disrupted. Around 20 million barrels of oil a day—roughly a quarter of global seaborne crude trade—passes through the narrow waterway, making it indispensable for major exporters such as Saudi Arabia, Kuwait, Qatar, the UAE and Iraq. The stakes are even higher for gas markets, with nearly one-fifth of global LNG supplies, largely from Qatar and the UAE, dependent on the same route and facing few viable alternatives. With Gulf countries holding only two to four weeks of storage capacity, any prolonged blockade could quickly force production cuts and send shockwaves through global energy markets. Additionally, nearly 20% of global liquefied natural gas (LNG) passes through the Strait, almost entirely from Qatar and the UAE. Unlike oil, there are virtually no alternative routes for these LNG volumes. However, there are storage constraints as GCC countries typically hold only two to four weeks of product storage before production must be shut down due to export blockages. Asia stands at the centre of the fallout from any disruption in the Strait of Hormuz, with an estimated 80 to 90 per cent of the oil and LNG passing through the route bound for major Asian economies. Countries such as China, India, Japan and South Korea are especially exposed to supply shocks, rising import costs and inflationary pressure if the waterway is blocked.

The impact extends well beyond energy. A prolonged blockade has also disrupted nearly 30 percent of global fertiliser trade, raising fears of supply shortages, higher agricultural input costs and a wider food security crisis across vulnerable regions. The knock-on effects could ripple through global supply chains, deepen inflation concerns and place added strain on already fragile economies.