Iran war: What is the Strait of Hormuz and why does it matter?

Iran and the US have agreed to a ceasefire on the condition that 'safe passage' through the Strait of Hormuz is guaranteed. This strait, connecting the Gulf to the Arabian Sea, is crucial for transporting 20% of the world's oil and 20% of liquefied natural gas. In 2025, about 20 million barrels of oil passed through this passage daily, representing nearly $600 billion in energy trade per year.