Israeli attack on Iran 'would damage UK economy' He replied: "Firstly, the Government firmly believes we should continue to pursue the diplomatic route in persuading Iran to abandon its nuclear ambtions, but in doing so we should take nothing off the table." He said: "In terms of a third party attack on Iran, in terms of the impact on the UK, anything which destabilises the region, which put at risk flows of oil from the Gulf, any attempt to close the straits of Hormuz, would have a direct and immediate effect on the price of oil and therefore a direct effect on the prospects for economic growth and economic recovery in the UK." Around 40 per cent of all seaborne shipments of oil travel through the Strait, which is little more than 100 miles wide. Some analysts have estimated that closing the Strait would increase oil prices by $40 to $50 a barrel. Iran has made several threats to close the Strait as part of the diplomatic stand-off over its nuclear programme. Such a threat in January this year cause a brief jump in oil prices. Mr Hammond also insisted that international economic sanctions on Iran "are having an impact" on the Iranian economy, and predicted "second-order effects" on Iran's society and government.