An Iranian legislator recently said that Iran might close the Strait of Hormuz for international shipping. Since 20% of the world´s oil apparently passes through the strait, it sounds like a credible threat.
And then, maybe not. Iran´s ally China would also be affected by such a move. So would Iran´s own oil exports! So unless the Iranian mullahs have some secret stash somewhere, closing the strait would presumably be a desperate last ditch move. Or an advanced form of self-mutilation...
Well, at least if ChatGPT is to be trusted.
If Iran were to close the Strait of Hormuz, it would severely limit its own ability to export oil by sea — including to China, its largest customer. However, there are a few alternative options Iran might theoretically use to export oil, though each comes with major limitations:
🚢 1. The Strait of Hormuz: Iran’s main export route
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~80–90% of Iran’s oil exports pass through the Strait of Hormuz, a narrow waterway connecting the Persian Gulf to the Arabian Sea.
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Closing it would choke Iran’s own exports, as well as those of Kuwait, Iraq, UAE, and Qatar.
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So it's often seen as a threat or pressure tactic, but not sustainable for Iran’s economy.
🚧 2. Overland alternatives to China: Limited and difficult
🇮🇷➡️🇨🇳 Via Pipeline (Overland)
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Iran does not currently have a direct oil pipeline to China.
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Possible future projects (like through Pakistan or Central Asia) have faced geopolitical and technical obstacles.
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The Iran–Iraq–Syria pipeline (sometimes proposed to reach the Mediterranean) is incomplete and faces war-related disruptions.
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Pakistan or Afghanistan routes to China would be highly unstable or politically risky.
🚂 Via Rail or Truck
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There is no viable railway or trucking system to transport oil from Iran to China at the volume and scale required for commercial crude exports.
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Logistically and economically inefficient.
🛢️ 3. The Goreh–Jask Pipeline (Iranian workaround)
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This is Iran’s only major alternative: a domestic pipeline from its oil fields to the port of Jask on the Gulf of Oman, outside the Strait of Hormuz.
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Operational since 2021, it allows Iran to export some oil without using the Strait.
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However, its capacity is limited — about 1 million barrels per day — far less than total Iranian production.
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It’s unclear how much of that oil could be efficiently routed to China specifically.
🧭 4. Other methods (less practical)
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“Ghost ships” or sanctions-evasion tactics: Iran has sent oil to China using ship-to-ship transfers, false flags, or rebranding oil as from another country. But this is covert, risky, and limited in scale.
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Use of Chinese-owned tankers under protection agreements — also limited and politically sensitive.
🧩 Conclusion:
If Iran closes the Strait of Hormuz, it would largely cripple its own oil exports, including to China.
It does have partial workarounds, like the Goreh–Jask pipeline, but not nearly enough to maintain its current export levels.
Such a closure would be a last-resort escalation, likely used as a temporary threat or in a wartime context — not a sustainable long-term strategy.
Would you like a map showing the trade routes and pipelines involved?
Yes, Iran’s economy is heavily dependent on oil exports, though the degree has varied over time due to sanctions, domestic policy shifts, and global market changes.
🛢️ Oil’s role in Iran’s economy:
1. Main source of foreign currency
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Oil (and to a lesser extent, natural gas) is Iran’s largest source of hard currency (like dollars and euros).
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Revenue from oil exports helps fund imports, stabilize the rial (Iran’s currency), and support government spending.
2. Government budget dependency
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Historically, up to 40–60% of Iran’s annual government revenue came from oil exports.
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Even after sanctions, oil remains a critical pillar of the budget.
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For example, in the 2023–2024 budget, oil exports were projected at 1.4 million barrels/day, priced at $85/barrel — a key assumption for fiscal planning.
3. GDP contribution
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The oil and gas sector contributes around 15–20% of Iran’s GDP in normal (non-sanction) years.
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When sanctions hit, this percentage can drop, but the ripple effect on the rest of the economy (e.g., currency devaluation, inflation) is significant.
⚠️ Impact of Sanctions
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U.S.-led sanctions, especially since 2018, slashed Iran’s oil exports from over 2.5 million barrels/day to as low as 300,000–700,000 at times.
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Iran has adapted partially by:
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Increasing non-oil exports (e.g., petrochemicals, minerals)
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Expanding trade with China, often off-the-books or using barter systems
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Boosting domestic production and subsidized industries
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🧩 Conclusion
Yes, Iran’s economy is structurally dependent on oil, especially for foreign exchange and budget revenue.
While it has made efforts to diversify, oil remains its economic lifeline, particularly in international trade.
Would you like a breakdown of Iran’s main trading partners or how sanctions affect daily life in Iran?
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