Following the collapse of ceasefire talks this weekend US President Donald Trump has ordered a full naval blockade of shipping into and out of the Persian Gulf.

Until now, the US has allowed Iranian crude and product

exports, and even eased sanctions so that more buyers could import these cargoes as the US has been so focused on keeping oil prices low. A naval blockade would cut off what limited oil is reaching the market from the Gulf and cause a new shock.

Since the start of the conflict on February 28, Iranian oil ships have been the only ones to pass through increasing the country's oil export revenues from around $1bn pre-war to an estimated $1.7bn. A blockade would cut Iran off from its income but have devastating consequences on the economies of the rest of the region too.

Technically under international law and naval blockade is an act of war but given the US-Israeli coalition launched an unprovoked attack over a month ago the two countries are already at war.

The possibility of a full naval blockade of the Strait of Hormuz by the US Navy has analysts warning of far-reaching consequences for both producers and consumers if traffic through the chokepoint were brought to a complete halt.

At least 16 ships crossed the Strait of Hormuz on April 11 during the temporary ceasefire for talks, marking the highest traffic rate since the start of the truce, according to NBC News.

Iran: Oil export revenue largely halted (except limited smuggling), severe budget pressure, potential internal unrest, and direct naval confrontation with US forces.

Saudi Arabia: Major oil export disruption (limited bypass via pipelines 4-5 mb/d), revenue loss, economic slowdown, and pressure on fiscal reserves.

UAE: Significant export reduction despite partial Fujairah bypass, revenue hit, and energy sector strain.

Kuwait: Almost total export blockage (no major bypass), sharp revenue drop, and economic contraction.

Iraq: Heavy export losses (minimal alternatives), budget crisis, and increased instability.

Qatar: LNG exports severely curtailed, major revenue decline, and power/export challenges.

China: Largest importer affected (38% of Hormuz flows), higher energy costs, industrial slowdown, and inflation pressure; draws on reserves.

India: Substantial oil import disruption (15% of global Hormuz flows, high dependence), fuel price rises, and economic growth slowdown.

Japan: High dependence (70-90% of oil imports via Hormuz), energy shortages, higher costs, and industrial impacts.

South Korea: Strong reliance (70% of oil imports), refinery and economic strain from supply risks.

Europe: Limited direct exposure (4% of flows) but global oil price spike causes higher fuel/energy costs and inflation.

United States: Minimal direct imports (2-5%), but global price surge raises gasoline/diesel costs, transport expenses, and contributes to inflation.

Russia: the Urals blend is already trading at a premium to Brent and the price differential will probably climb even higher now, earning the Kremlin a large windfall.

Energy analysts note that even the perception of disruption in Hormuz can trigger sharp price volatility, as seen during previous regional crises. The International Energy Agency has previously warned that sustained closure of the strait would constitute a severe supply shock, forcing countries to draw on strategic reserves while accelerating shifts in trade flows. Goldman Sachs last week called this “the worst oil crisis in history.”