Global Markets on Edge as Iranian Parliament Moves Bill to Close of Strait of Hormuz

...."The Most serious escalation seen in the Gulf in years"

....As US calls on China to persuade Iran not to close Strait..

By Kwedu Correspondent

The Iranian parliament has approved a bill proposing the closure of the Strait of Hormuz, a critical maritime chokepoint through which nearly 20% of the world’s oil and a third of all liquefied natural gas (LNG) passes daily.

The bill now awaits final ratification by Iran’s Supreme Leader, Ayatollah Ali Khamenei, a move that could unleash severe global economic and geopolitical consequences.

The Strait, situated between Iran and Oman, connects the Persian Gulf to the Arabian Sea and the broader Indian Ocean.

Any disruption to traffic through this passage would dramatically impact global energy supplies.

Oil prices surged on international markets following the announcement, with Brent crude climbing by 8% in early trading.

“This is the most serious escalation we’ve seen in the Gulf in years.

“Should Iran follow through, global energy supply chains will be strained, and vulnerable economies, especially those reliant on fuel imports, will suffer disproportionately," said Dr. Rachel McKinnon, a Middle East energy policy expert at the University of London.

In Africa, where many nations depend on imported fuel, the impact could be particularly harsh.

Renowned Zimbabwean Journalist, Hopewell Chin'ono writing on social media, said rising energy prices are likely to drive inflation, strain currencies, and prompt interest rate hikes from central banks already grappling with fragile post-pandemic recoveries.

Some analysts say Zimbabwe’s local currency, the ZIG, has already shown signs of pressure, with investors retreating to safer assets like the U.S. dollar and gold.

The Iranian government has framed the move as a defensive measure following what it describes as “acts of aggression” by the United States and Israel.

Iranian officials have reportedly threatened to mine the strait in response to American involvement in recent Israeli strikes on Iranian targets.

The U.S. Navy’s Fifth Fleet, based in Bahrain, has long maintained a presence in the Gulf to ensure freedom of navigation in the region.

Pentagon officials have called any closure of the strait a “red line,” warning that such an action could be interpreted as an act of war.

Global markets are watching with concern with James Koh, the Chief Analyst at Global Commodities Watch saying, "We are entering uncharted waters, a full closure would disrupt shipping routes, impact insurance costs, and ripple across global trade."

He said beyond oil, it could hit food prices, supply chains, and manufacturing in unpredictable ways.

Critics have also pointed fingers at recent American foreign policy decisions, including the Trump-era airstrikes in Iran, for escalating tensions.

Others argue that Tehran is using the threat of closure as a geopolitical bargaining chip.

The United Nations has called for diplomatic dialogue, warning that military escalation in the Gulf would have catastrophic consequences for global peace and economic stability.