Why a Potential Closure of the Strait of Hormuz May Trigger International Law Challenges on Freedom of Navigation and State Sovereignty

A report prepared by Wood Mackenzie has warned that a prolonged closure of the Strait of Hormuz could generate a severe global energy crisis, with the prospect of oil prices climbing to two hundred dollars per barrel by the latter part of 2026, thereby placing extraordinary strain on worldwide economic stability. The analysis outlines three distinct scenarios, ranging from a moderate disruption to a worst‑case situation, and the worst‑case projection anticipates a significant contraction of global economic activity, underscoring the systemic importance of uninterrupted oil flow through this narrow maritime corridor. These projections echo earlier warnings issued by Iranian authorities, who have previously signalled that escalating regional tensions could precipitate a shutdown of the waterway, thereby reinforcing the strategic sensitivity of the strait to both commercial and geopolitical considerations. The convergence of the Wood Mackenzie assessment with Iran’s prior cautions underscores the heightened risk perception among market participants, prompting a broader dialogue on the potential legal and regulatory ramifications of any actual obstruction of this vital shipping route. Given the centrality of the strait to the transport of a substantial share of the world’s petroleum supplies, any sustained interruption is expected to reverberate through international trade patterns, amplify price volatility, and potentially trigger policy responses from a range of state and non‑state actors concerned with energy security and economic stability.

One question is whether a prolonged closure of the Strait of Hormuz would be permissible under the provisions of the United Nations Convention on the Law of the Sea, which codifies the right of innocent passage and the obligation of states to ensure the safety of navigation in international straits used for international navigation. The Convention distinguishes between territorial seas, where coastal sovereignty may be exercised, and international straits, where the freedom of navigation enjoys a higher degree of protection, suggesting that any unilateral shutdown could constitute a breach of the treaty’s normative framework unless justified by a lawful exception such as self‑defence or a threat to international peace and security. Consequently, the legality of an actual closure would likely be examined in light of Article 38 and related provisions, requiring a rigorous assessment of whether the measure satisfies the necessity, proportionality, and immediacy criteria embedded within the customary international law norms governing the use of force and the protection of essential maritime routes.

Perhaps the more important legal issue is the extent of the coastal state’s sovereign rights to regulate transit through its territorial waters adjoining the strait, given that the median line of the waterway falls under the jurisdiction of neighboring littoral states. While coastal states retain the authority to enforce environmental standards, customs regulations, and anti‑piracy measures within their territorial seas, they are prohibited from imposing measures that impede the continuous and expeditious passage of foreign vessels, thereby creating a tension between sovereign regulatory interests and the internationally recognised freedom of navigation. A judicial determination of the permissible scope of such regulatory actions would likely hinge on interpreting the balance between the narrow exceptions permitted under the Convention and the broader obligations of states to maintain the strait as a conduit for unimpeded international commerce.

Another possible view is whether affected states could invoke the principle of freedom of navigation to seek provisional measures before the International Court of Justice, arguing that an imminent or actual obstruction threatens fundamental economic rights and international peace. The Court, under Article 94 of the Statute, may indicate that a risk of irreparable harm exists, thereby granting interim relief aimed at preserving the status quo and preventing a de facto closure of the strait while substantive litigation proceeds. However, the admissibility of such a case would depend on the existence of a dispute between states with a legal basis, the consent of the parties to the Court’s jurisdiction, and the demonstrable link between the alleged closure and a breach of specific treaty obligations governing maritime navigation.

A competing view may be that collective security actions authorized by the United Nations Security Council could provide a legal basis for preventing an unlawful closure, invoking Chapter VII powers to maintain international peace and security. Under such a framework, the Council could impose binding resolutions, authorize naval patrols, or endorse sanctions aimed at deterring any unilateral attempt to block the strait, thereby integrating the dispute within the broader architecture of international peace‑enforcement mechanisms. Nonetheless, the political dynamics within the Council, the veto power of permanent members, and the need to demonstrate a clear link between the alleged obstruction and a threat to international stability would shape the feasibility and legal robustness of such measures.

The issue may require clarification on the procedural mechanisms for dispute resolution, including the role of the International Tribunal for the Law of the Sea, which possesses jurisdiction over maritime delimitation and navigation disputes, and the threshold for invoking the right of self‑defence as articulated in Article 51 of the United Nations Charter. A state alleging that the closure constitutes an armed attack could argue for anticipatory self‑defence, but such a claim would be subject to the stringent criteria of necessity, immediacy, and proportionality, as elaborated in customary international law and judicial pronouncements of the International Court of Justice. Finally, the interplay between diplomatic negotiations, possible arbitration under the Annex VII of UNCLOS, and the potential for sanctions or collective measures underscores the complex legal landscape that would govern any realisation of a prolonged Hormuz shutdown, rendering the scenario not merely an economic concern but a multifaceted challenge to the existing international legal order.