As tensions flare once again between Iran, Israel and the United States, social media, particularly crypto social media Such a move, many worry, could send oil prices and global inflation soaring and disrupt financial markets, including Bitcoin.
However, these concerns could be exaggerated, according to some observers.
Israel and the United States launched airstrikes against Iran on Saturday morning, aiming to dismantle the country’s nuclear facilities and missile capabilities after negotiations failed. Iran responded by firing ballistic missiles at Israel and US bases in the region, heightening fears of a full-blown military conflict.
This has sparked some nervousness in the crypto market, the only place open for investors to express their fear and risk, while traditional markets remain closed over the weekend.
Bitcoin the leading cryptocurrency by market value, fell to $63,000 from around $65,600 before rebounding to $65,000. Oil-related futures on Hyperliquide jumped more than 5%.
Hormuz fears
The Strait of Hormuz is a chokepoint (21 miles wide at its narrowest point) between Iran to the north and Oman to the south, and has facilitated the transport of about 20 million barrels of oil each day in 2024, according to the U.S. Energy Information Administration (EIA).
Naturally, amid simmering tensions, crypto accounts on
“If a direct conflict between the United States and Iran begins, it is not just a geopolitical issue. It is a global economic event. If the Strait of Hormuz is threatened, oil could rise to $120-$150,” said a pseudonym X called @Crypto_Diet.
This could lead to an inflationary shock, market sell-offs, a rising dollar and a depreciation of emerging market currencies, the message added.
Several other accounts have posted similar views, with some savvy geopolitical experts sharing these concerns.
“Oil prices had already reached a six-month high before the strikes. Iran is a founding member of OPEC and the Strait of Hormuz, through which around 20% of the world’s oil passes, is now directly involved,” said geopolitical strategist Velina Tchakarova.
In addition to this, some media are already reporting that several oil majors, including trading companies, have suspended oil and fuel shipments through the strait.
Outright closure unlikely
Some observers, however, have argued that an outright closure of the strait is not in Iran’s best interests and may be geographically impossible.
According to Daniel Lacalle, PhD economist, fund manager and chief economist at Tressis, Iran currently produces 3.3 million barrels of oil per day, but only exports half of it, almost all of which goes to its ally China.
“It would shoot itself in the foot,” Lacalle said, downplaying fears of a possible closure of the strait by Iran.
He added that OPEC members could quickly offset any potential disruption to Iranian oil supplies, while emphasizing that the United States alone is the world’s largest oil producer.
In other words, any rise in oil prices could be measured and temporary.
The other aspect to consider is geography. Although the strait is split roughly down the middle between Iran and Oman, shipping lanes are primarily in Omani waters. Indeed, it is said that the water on the Iranian side is shallower, while on the Omani side it is deeper and better suited to the movement of large oil tankers.
So technically the ships could pass through Oman’s shipyard, meaning Iran’s closure of its territory might not have a big impact on supplies.
“Most of the waterways are in Oman, not Iran,” energy market expert Dr. Anas Alhajji told X.
“The Strait of Hormuz has never been blocked despite all the wars. It cannot be blocked. Too wide. Well protected,” he added.
All things considered, the chances of Iran closing the strait and choking off oil supplies are low. That said, an all-out war can still trigger widespread risk aversion, potentially pushing Bitcoin below the widely watched $60,000 support level.
At the same time, the Bitcoin price chart also signals a potential for a deepening bear market amid the Middle East crisis.
