With my paper, I will illustrate the economic importance of the Strait of Hormuz for the world while giving a short update on the current political situation. Nevertheless, I will keep the focus on possible consequences of Iran closing the Strait, be it on an international or Iranian level.
This analysis will be carried out based on recent research. Additionally, similar situations which occurred in the past, namely the conflict between the US and Iran in 1988, which culminated in “Operation Praying Mantis”, can be used to predict the consequences of the closure of the Strait of Hormuz nowadays. Further on, I will construct two scenarios: one of further escalation and another one of de-escalation. Three indicators, that is the development of the price of Brent crude oil, numbers depicting Iranian GDP growth, and the Consumer Price Index will allow me to deliver a prognosis, on what effects each one of these scenarios might have for Iran as well as the global economy. The hypothesis, which is going to be reviewed in the conclusion of this paper, is the following: “A closure of the Strait of Hormuz would have serious consequences for the global economy.”
Inhaltsverzeichnis (Table of Contents)
- Abstract
- Introduction
- The Strait of Hormuz and its Economic Importance
- Global Importance
- Importance for Iran
- Recent Political Developments
- Situation 2020
- Economic Indicators and their Claims
- Oil Price
- GDP Growth
- Consumer Price Index
- Possible Outcomes
- De-escalation and its Consequences
- For Iran
- For the Globe
- Escalation and its Consequences
- For Iran
- For the Globe
- De-escalation and its Consequences
- Conclusion
- Literature
- Appendix
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This paper examines the economic implications of Iran closing the Strait of Hormuz, a crucial oil chokepoint, in response to escalating tensions with the United States. By analyzing economic indicators such as GDP growth, the Consumer Price Index, and the oil price, the paper aims to provide a comprehensive understanding of the potential consequences of such an action on both Iran and the global economy.
- The strategic importance of the Strait of Hormuz for global oil transit and the Iranian economy.
- The impact of a potential closure on oil prices and the resulting economic ramifications for international markets.
- The economic repercussions for Iran, including the effects of sanctions and potential economic growth.
- The role of global actors and the possibility of de-escalation or further escalation of tensions between Iran and the United States.
- The potential consequences of the closure on the global economy and the possibility of recession.
Zusammenfassung der Kapitel (Chapter Summaries)
- Introduction: This chapter provides an overview of the escalating tensions between the United States and Iran since the withdrawal from the Iran nuclear deal. It introduces the paper's objective to assess the economic consequences of a potential closure of the Strait of Hormuz by Iran.
- The Strait of Hormuz and its Economic Importance: This chapter highlights the crucial role of the Strait of Hormuz in global oil transit and its economic importance for Iran. It emphasizes the high volume of oil flowing through the Strait and the dependence of major economies on this route.
- Recent Political Developments: This chapter analyzes the current political situation between the United States and Iran, including the imposition of sanctions on Iran and the deployment of troops in the Middle East. It also examines the potential motivations for Iran to close the Strait of Hormuz.
- Possible Outcomes: This chapter explores two potential scenarios: de-escalation and escalation. It outlines the potential economic consequences of each scenario for both Iran and the global economy, considering the impact on oil prices, GDP growth, and the Consumer Price Index.
Schlüsselwörter (Keywords)
The main focus of this paper lies on the economic consequences of a potential closure of the Strait of Hormuz by Iran. Key topics include: Strait of Hormuz, oil prices, GDP growth, Consumer Price Index, economic sanctions, Iran nuclear deal, US-Iranian relations, de-escalation, escalation, global economy.
- Quote paper
- Nathanael Schabrun (Author), 2020, The Economic Consequences of Iran Closing the Strait of Hormuz, Munich, GRIN Verlag, https://www.grin.com/document/1139766
