Iran Limits Access to Key Oil Passage, Strait of Hormuz, Amid U.S. Talks

• The temporary closure marks the first time Iran has shut parts of the strait since U.S. President Donald Trump threatened military action in January
• About 13 million barrels per day of crude oil transited the Strait of Hormuz in 2025, accounting for 31% of global seaborne crude flows according to Kpler data
• Oil prices rose slightly on the news, with Brent crude up 0.1% to $68.71 per barrel and U.S. WTI futures up 1.4% to $63.82

Summary: Iran Limits Access to Strait of Hormuz Amid U.S. Nuclear Talks

Key Development:

Iran partially and temporarily closed the Strait of Hormuz on Tuesday, citing "security precautions" during Revolutionary Guards military drills called "Smart Control of the Strait of Hormuz." This marks the first such closure since January when President Trump threatened military action.

Strategic Importance:

The Strait of Hormuz is a critical global oil chokepoint located between Oman and Iran. Approximately 13 million barrels per day of crude oil transited through the strait in 2025, representing roughly 31% of global seaborne crude flows, according to Kpler market intelligence.

Timing and Context:

The closure coincides with ongoing U.S.-Iran nuclear negotiations in Geneva, Switzerland, aimed at resolving disputes over Tehran's nuclear program. Both nations have increased their military presence in the region, heightening tensions.

Military Exercise:

Iran's Revolutionary Guards conducted the exercise to improve operational readiness and strengthen deterrence capabilities. The temporary closure was framed as a shipping safety measure during the drills.

Market Impact:

Oil prices showed modest gains following the announcement. Brent crude futures (April delivery) rose 0.1% to $68.71 per barrel, while WTI futures (March delivery) increased 1.4% to $63.82. Energy market participants are closely monitoring the U.S.-Iran talks outcome given the strategic importance of the waterway to global oil supplies.

Implications:

Any disruption to the Strait of Hormuz poses significant risks to global energy markets, potentially affecting crude supply chains and pricing. The partial closure underscores geopolitical tensions and Iran's leverage over critical energy infrastructure during diplomatic negotiations.