Hong Kong (CNN) — While there have been no major disruptions to the global oil supply so far, the attacks on Iran — by Israel and then the US — have rattled investors, sending oil futures soaring by around 10% since the start of hostilities, among fears Iran could retaliate by disrupting shipping in the Strait of Hormuz.

From the perspective of the global economy, there are few places as strategically important. The waterway, located between the Persian Gulf and the Gulf of Oman, is only 21 miles wide at its narrowest point. It’s the only way to ship crude from the oil-rich Persian Gulf to the rest of the world. Iran controls its northern side.

About 20 million barrels of oil, about one-fifth of daily global production, flow through the strait every day, according to the US Energy Information Administration (EIA), which called the channel a “critical oil chokepoint.”

On Sunday evening, following US airstrikes on three of Iran’s nuclear facilities, Brent crude, the global benchmark, briefly surged above $80 per barrel, according to Refinitiv data, the first time that’s happened since January. Before the conflict, prices had largely hovered between $60 and $75 a barrel since August 2024.

But in Monday trading in European and US markets, both Brent and US benchmark WTI were down more than 6%, falling below $71, following a Iranian attack on US bases in Qatar and Iraq that appeared to result in no casualties.

Whether oil prices will climb further now depends on Iran’s response. Rob Thummel, senior portfolio manager at energy investment firm Tortoise Capital, told CNN that a potential disruption to the Iran-controlled sea route would cause oil prices to surge toward $100 per barrel. That would be the highest price for oil in about three years, since soon after the start of sanctions on Russia following its attack on Ukraine.

President Donald Trump does not want to see a similar the spike in oil and gasoline prices as the one that occurred after Russia’s 2022 invasion of Ukraine. He has frequently bragged about oil prices since he took office, and the even lower price for oil during his first term, although the latter was largely caused by the pandemic crashing demand for oil.

“EVERYONE, KEEP OIL PRICES DOWN. I’M WATCHING! YOU’RE PLAYING RIGHT INTO THE HANDS OF THE ENEMY. DON’T DO IT!,” Trump posted Monday on Truth Social.

Will the Strait be closed?

A prominent adviser to Iran’s supreme leader, Ayatollah Ali Khamenei, has already called for the closure of the Strait.

A functioning Strait of Hormuz is “absolutely essential” to the health of the global economy, he said.

“Following America’s attack on the Fordow nuclear installation, it is now our turn,” warned Hossein Shariatmadari, the editor-in-chief of the hardline Kayhan newspaper, a well-known conservative voice who has previously identified himself as a “representative” for Khamenei.

Geographic leverage over global shipping gives Iran the “capacity to cause a shock in oil markets, drive up oil prices, drive inflation, collapse Trump’s economic agenda,” Mohammad Ali Shabani, an Iran expert and editor of the Amwaj news outlet, told CNN.

In addition, Iran’s Parliament approved a motion to close the Strait. But a final decision on the matter rests with the nation’s Supreme National Security Council.

White House Press Secretary Karoline Leavitt on Monday warned Iran against closing the Strait of Hormuz.

“I can assure you, the administration is actively and closely monitoring the situation in the Strait of Hormuz, and the Iranian regime would be foolish to make that decision,” she said.

Trump seemed to suggest in a post on social media that increased US production would be able to solve any cut-off of crude shipments through the waterway.

“To The Department of Energy: DRILL, BABY, DRILL!!! And I mean NOW!!!,” he posted on Truth Social.

The United States already produced a world record amount of oil last year, about 13.2 million barrels a day on average. But it doesn’t have the ability to fill the gap if 20 million barrels a day can no longer flow through the strait.

Two supertankers, each capable of hauling about 2 million barrels of crude, headed through the Strait of Hormuz at the mouth of the Persian Gulf, having performed U-turns in the past 24 hours, according to a report from Bloomberg that was confirmed by CNN. But most traffic appears to be moving normally for now.

The Joint Maritime Information Center, a global maritime body, issued an alert Monday saying that ships are already being hit by “persistently higher levels of electronic interference,” affecting satellite navigation systems.

“Some vessels have chosen to sail through the SoH during daylight hours,” said the alert. “Furthermore, JMIC has observed increasing ship congestion near Dubai and in the southern Gulf of Oman, most likely due to waiting for orders.”

Maersk, one of the world’s largest shipping lines posted a statement early Monday saying that “at the moment, we continue to deem sailing through the Strait of Hormuz possible, but we monitor the situation closely and have contingency plans in place should the situation change in the near future.”

When it comes to moving oil, the Strait is actually much narrower than its 21-mile official width. The navigable shipping lanes for massive supertankers are only about two miles wide in each direction, requiring vessels to pass through both Iranian and Omani territorial waters.

Risks for Iran from closing the Strait

But Vandana Hari, founder and CEO of Vanda Insights, which tracks energy markets, sees Iran’s blocking of the Strait as a “remote tail risk.” The presence of a beefed-up US naval fleet in the region is both a deterrent and a response tool, she said

“Iran has a lot to lose and very little, if anything, to gain by attempting to close the Strait,” Hari said. “Iran cannot afford to turn its oil-producing neighbors, who have been neutral or even sympathetic towards the Islamic Republic as it faced Israeli and US attacks, into enemies, any more than trigger the ire of its main crude market, China.”

A closure of the Strait would be particularly detrimental to China and other Asian economies which rely on the crude oil and natural gas shipped through the waterway. The EIA estimates that 84% of the crude oil and 83% of the liquefied natural gas that moved through the Strait of Hormuz last year went to Asian markets.

China, the largest buyer of Iranian oil, sourced 5.4 million barrels per day through the Strait of Hormuz in the first quarter this year, while India and South Korea imported 2.1 million and 1.7 million barrels per day, respectively, according to the EIA’s estimates. In comparison, the US and Europe imported just 400,000 and 500,000 barrels per day, respectively, in the same period, according to the EIA.

But crude oil is a globally traded commodity, and price changes in one place affect prices everywhere.

At a regular Foreign Ministry press conference on Monday, China stressed the importance of the Persian Gulf and its surrounding waters for international trade, saying that maintaining security and stability in the region serves the common interests of the international community.

“China calls on the international community to step up efforts to promote de-escalation of the conflict and to prevent regional turmoil from exerting a greater impact on global economic development,” Foreign Ministry spokesperson Guo Jiakun said.

On Sunday, India’s Minister for Petroleum and Natural Gas Hardeep Singh Puri sought to reassure jittery investors on X that the country has “diversified” its oil supplies in the past few years.

“A large volume of our supplies do not come through the Strait of Hormuz now. Our Oil Marketing Companies have supplies of several weeks and continue to receive energy supplies from several routes,” he said. “We will take all necessary steps to ensure stability of supplies of fuel to our citizens.”