Summary

The global economy is facing mounting uncertainty as Donald Trump’s blockade of the Strait of Hormuz comes into force, choking one of the world’s most critical oil and shipping routes. The US Navy is now under orders to block any ships travelling to or from Iranian ports, with vessels already halted and traffic through the strait dramatically reduced. WATCH THE VIDEO ABOVE: US blockades Iranian ports in Strait of Hormuz Know the news with the 7NEWS app: Download today Retired Lieutenant General Richard Newton pointed to a glaring detail that shows how disruptions in the strait would send shockwaves through global markets. “We only have three or four ships a day going through there at the behest of the Iranians. Usually, it’s about up to 100 to 120 ships a day,” he explained. “The global economy is really resting on the Strait of Hormuz.” The strait carries roughly a fifth of the world’s oil supply and is a key artery for energy into Asia, where most of Australia’s oil is refined, making any disruption a major risk to global supply chains and economic stability. According to Newton, the blockade is a direct economic strategy targeting Iran’s financial lifeline. “Blocking the strait really does have an impact on their economy. Ninety per cent of Iran’s oil economy goes through the Strait, and 20 per cent of the world’s oil economy also goes through the strait,” he said. International security specialist Will Geddes said the economic implications extend beyond the region, given the volume of global oil moving through the passage and China’s reliance on Iranian supply. “China has had an agreement with Iran for quite some time, which has been a trade of weapons to oil. Now, China is going to want to protect its investment,” Geddes explained, noting that intelligence suggests China has been moving military capabilities to Iran. Your cookie settings are preventing this third party content from displaying. If you’d like to view this content, please adjust your . To find out more about how we use cookies, please see our Cookie Guide. Iran has already prepared extensive defences, including mines in the sea, cruise missiles on the coast, and a fleet of attack boats, while also threatening to target desalination plants and electricity supplies in US-allied Gulf states if the US strikes Iranian infrastructure. The war in the Middle East has already caused oil prices to spike significantly globally, with concerns mounting that the US military presence, while substantial, could be stretched thin if Iran launches diversionary attacks. Iran has declared the blockade a violation of their ceasefire agreement. Stream free on