The Strait of Hormuz, through which 21 percent of the world's crude oil is transported, plays a crucial role in the global economy. If Iran decides to disrupt or even completely eliminate shipping traffic in this region, it could trigger a global crisis.
Iran itself relies on income from oil trade and has to transport its own oil through this strait. But if the US and its allies decide to impose stricter sanctions on Iranian oil than before, Tehran would have nothing to lose. Iran can use this leverage to drive up the price of oil. Asia would be the most affected as these countries get 80 percent of their oil from this region. But Western allies want to limit the very source of revenue that Tehran uses to finance terrorist groups like Hamas and Hezbollah. A balancing act, then, is needed to avoid a global oil crisis. It is difficult to assess whether a closure of the Strait of Hormuz is likely. But the worst scenario would be if Iran blocked the strait and all merchant ships wishing to enter or leave the Persian Gulf must pass through it.