The cost to charter a supertanker to carry oil from the Middle East to China has more than doubled in the last week, reaching a record high of over $400,000 per day, as Iran threatened to block the Strait of Hormuz following recent US and Israeli strikes, according to data cited by the BBC on March 3, 2026. The surge in shipping costs underscores the escalating economic consequences of the conflict and the vulnerability of global energy supplies.
The Strait of Hormuz, a narrow waterway separating Iran and Oman, is a critical chokepoint for global oil trade. At its narrowest point, the strait is only 40 kilometers (25 miles) wide, with shipping lanes in some areas extending to just 3 kilometers (1.9 miles) in each direction, as reported by Le Monde. Approximately 20% of the world’s crude oil passes through the strait daily, equating to roughly 20 million barrels, or nearly $600 billion worth of energy trade annually, according to the US Energy Information Administration (EIA) data cited by the BBC.
Ebrahim Jabbari, an advisor to the commander-in-chief of Iran’s Islamic Revolutionary Guard Corps (IRGC), warned on Iranian state television that any vessel attempting to transit the strait would be “burned,” according to the BBC. This declaration followed attacks by the United States and Israel on Iranian targets, raising fears of a wider regional conflict and disruption to oil flows. Brent crude, the international benchmark for oil prices, surpassed $79 a barrel on Monday, March 3, 2026, a roughly 9% increase since February 28, the day the attacks began.
The potential closure of the Strait of Hormuz poses a particularly acute threat to Asian economies, which rely heavily on Middle Eastern oil. Asia accounts for more than half of the world’s population and nearly a third of global economic output. China, in particular, has urged “all parties” to ensure the safety of navigation through the strait, according to Le Monde, and is reportedly pressuring Iran to allow oil tankers and gas carriers to pass.
While the Strait of Hormuz is vital, some analysts suggest alternative routes exist, though they are less efficient. According to analysis reported by CNEWS, access to the strait is not essential for Asia-Europe trade, as the route ultimately reaches a “dead conclude” near Kuwait, Iraq, and Iran. Yet, this assessment does not diminish the immediate impact of disruptions on oil prices and shipping costs.
Recent incidents include fires at the port of Ben Zayed in Abu Dhabi and attacks on at least four ships on March 1st and 2nd, including a tanker where one crew member died, as reported by Omani authorities. Another tanker was reportedly ablaze in the port of Bahrain. The situation remains fluid, and the long-term consequences of the escalating tensions are yet to be fully determined. Sir Alex Younger, former director of the British intelligence agency MI6, stated to the BBC that closing the strait would create a “considerable economic problem” due to its impact on oil prices.
