TEHRAN, July 14 — Iran’s oil exports have been slashed to a fraction of their former volume, and the country’s leverage over global energy markets now rests on a narrow, heavily militarized waterway. The practical upshot for the rest of the world is straightforward: any conflict that chokes that chokepoint could send gasoline prices climbing everywhere. Iran sits on the world’s fourth-largest proven crude oil reserves—155.6 billion barrels as of 2020—and remains a member of OPEC.
Before the reimposition of U.S. sanctions in 2018, the country was exporting an average of 2.1 million barrels per day in 2017. By 2019, that number had fallen to around 500,000 barrels per day.
The sanctions, which target Iran’s oil sales, banking, and shipping, have hammered the country’s revenue from oil. Iran’s oil revenue was estimated at $60 billion in 2011; by 2019, it had dropped to $20 billion. Here’s what it means in plain terms.
Iran has threatened to close the Strait of Hormuz in response to conflict. That strait is not a minor route.
In 2023, about 17 million barrels of oil passed through it every day—roughly 20% of the world’s total oil flow. If that passage were disrupted, global supply would take an immediate hit. Brent crude was trading at about $70 per barrel in early 2025, and a disruption of that magnitude would almost certainly drive prices higher.
The U.S. buffer
The United States maintains a Strategic Petroleum Reserve that held 375 million barrels as of 2025. That reserve is designed as a cushion against exactly this kind of supply shock—a national emergency stockpile that can be tapped when commercial supplies are threatened. It provides some breathing room, but it is not infinite.
A prolonged closure of the strait would test the limits of any reserve. The potential war scenario that analysts are watching is not hypothetical.
Iran’s oil exports have already been squeezed to roughly a quarter of their pre-sanctions volume. With revenue sharply reduced, the regime has fewer economic options. The strait threat becomes one of the few cards it can still play.
The calculation for global markets is simple: even a temporary closure would send prices spiking, and the economic fallout would be felt well beyond the Middle East.
What to watch next
The key variable is whether the current U.S. administration maintains the sanctions regime that has already proven effective at cutting Iran’s export revenue. Any escalation in the Persian Gulf, whether from Iranian military action or a U.S. response, would put the Strait of Hormuz back at the center of global energy anxiety. For ordinary drivers and businesses, the practical upshot is that the price at the pump is tied, more than most realize, to the stability of that narrow stretch of water.
Sources
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