What would happen to the global economy if Iran were to close both the Strait of Hormuz and the Bab el-Mandeb Strait?

The strategic maritime corridors in the region are experiencing increasing tension, with growing talk of a potential closure of the Strait of Hormuz and threats extending the crisis to the Bab el-Mandeb Strait, raising concerns about widespread economic repercussions on global trade and commodity prices.

The Strait of Hormuz, located between Iran and Oman, is one of the world’s most important energy transit routes, with roughly 20% of global oil supplies passing through it. Amid rising tensions, Tehran has warned of potential additional measures if military escalation continues, signaling the possibility of targeting other maritime routes.

Another key passage is the Bab el-Mandeb Strait, approximately 29 kilometers wide, located between Yemen and Djibouti at the southern entrance of the Red Sea. The strait holds strategic importance as a major trade route between Asia and Europe.

Estimates indicate that the Houthi group in Yemen controls extensive areas along the eastern coast of the Red Sea, theoretically giving them the ability to threaten or disrupt maritime navigation if the conflict escalates.

Meanwhile, concerns are rising about potential Iranian influence on the opposite Red Sea coast through allies in Sudan, which could put this vital maritime passage under increased pressure.

If both straits were closed simultaneously, it would directly impact the Suez Canal, one of the world’s most important trade routes and a key source of revenue for Egypt, as the canal would lose a significant portion of passing ship traffic.

In this scenario, commercial vessels traveling between Europe and Asia would have no choice but to sail around the African continent via the Cape of Good Hope, adding an estimated 10 to 18 days to shipping times.

Major global shipping companies have already started taking precautionary measures by rerouting vessels through the African route in anticipation of potential disruptions in Middle Eastern maritime corridors.

Economic reports warn that longer voyages would mean higher shipping and insurance costs, directly affecting global commodity prices.

Approximately 12% of global trade passes through the Bab el-Mandeb Strait, making any disruption there a significant factor in the international economy.

If both critical passages were closed, experts expect a widespread surge in prices, with immediate impacts on Middle Eastern countries and global supply chains and energy markets.