June 20, 2025
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4:40Now PlayingAlisa Rusanoff, CEO at Eltech, discusses the current state of trade finance and risks associated with the conflict between Israel and Iran.
Israeli aerial bombardment has wiped out much of Iran’s ballistic missile capability and decapitated its military command, but Supreme Leader Ali Khamenei has refused to stop fighting, even promising “irreparable damage” to the US if it intervenes in the conflict in support of its staunch ally.
This has stoked speculation that Iran’s leadership may reach for another way to pressure its enemies to relent — blocking or effectively closing the Strait of Hormuz to shipping. This narrow waterway at the mouth of the Persian Gulf handles around a quarter of the world’s oil trade. So if Iran were able to deny access to the giant tankers that ferry oil and gas to China, Europe and other major energy consuming regions, it would send oil prices shooting higher and potentially destabilize the global economy.
Iran has targeted merchant ships traversing the choke point in the past, and has even threatened to block the strait. The UK issued a rare warning to mariners days before Israel began bombarding Iran, saying increased tensions in the region could impact shipping, while Frontline Ltd., one of the world’s largest oil-tanker operators, said it would be more cautious about offering its vessels to haul cargoes from the Persian Gulf.
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