The recent 12-day Iranian-Israeli war was a key reason behind the latest disruptions in global oil prices. Central to the turmoil was Iran’s threat to close the Strait of Hormuz, a critical chokepoint for global oil trade. This threat escalated when the Iranian parliament voted in favor of closing the strait and referred the decision to the country’s highest security authority for final approval. However, this move was halted following negotiations that led to a ceasefire between both sides.

In this Factsheet, we explore the strategic importance of the Strait of Hormuz to global oil trade, along with other key maritime routes such as the SUMED pipeline and the Suez Canal. We also examine recent trends in global oil prices and major shocks that occurred during the first half (H1) of 2025.

• In 2024, global oil trade was valued at $1.1 trillion, with Russia, the US, and the UAE being the top exporters, accounting for 33% of total exports. Meanwhile, China, the US, and India were the top importers, capturing 49% of total global imports.
• Crude oil and petroleum products transit through several strategic maritime chokepoints, including the Strait of Hormuz, the Bab El-Mandeb Strait, the Suez Canal and SUMED pipeline, the Panama Canal, the Bosphorus and Dardanelles in Türkiye, and the Strait of Malacca.
• According to the latest available data, the Strait of Malacca, linking the Indian Ocean and the Pacific Ocean, has the largest share of global maritime oil trade at 31%, followed by the Strait of Hormuz at 20%. The Suez Canal and SUMED Pipeline receive around 11% of global oil trade movements; however, their share decreased to 6% in 2024 following the geopolitical tensions in the Red Sea.
• In H1 2025, the global oil market witnessed three main events that sharply affected prices.
• In January 2025, oil prices surged above $80 per barrel. The increase was driven by tighter US sanctions on Russian and Iranian oil exports and a severe cold snap in North America and parts of the Northern Hemisphere, which spiked heating fuel demand.
• In May 2025, prices declined to four-year lows as OPEC+ ramped up output by nearly 1 million barrels per day in April-June. This raised concerns about oversupply amid uncertain demand.
• June 2025 witnessed a sharp jump of 10-13% in oil prices, triggered by Israel’s surprise attack on Iran on June 13^th, followed by US strikes on Iranian nuclear facilities. These tensions raised fears of disruption in the Strait of Hormuz and Middle East supply instability.
• The US Energy Information Administration (EIA) forecasts Brent crude to average around $65.85 per barrel, while P. Morgan expects a similar average at $66. Goldman Sachs projects Brent at $62 and estimates WTI crude price at $58 per barrel by the end of 2025, with downside risks if global economic growth slows or OPEC+ increases supply significantly.

By: Amina Hussein

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