A narrow waterway separating the Arabian Peninsula from Iran is once again at the centre of a global energy crisis. The Strait of Hormuz, just 21 miles wide at its narrowest point, carries approximately one-fifth of the world’s oil supplies and a substantial share of global LNG shipments. Its effective closure following the escalation of military conflict in the Middle East has triggered alarm in energy markets and prompted warnings that oil could exceed $100 a barrel.
Iran reportedly issued warnings to tankers following US and Israeli military strikes, stating that no ships would be permitted to pass through the strait. Two vessels were subsequently attacked — one near Oman and another near the United Arab Emirates. Marine tracking data confirmed that tankers were backing up on both sides of the waterway, creating an unprecedented logjam of energy shipments at one of the world’s most critical chokepoints.
The economic consequences of a prolonged closure are potentially severe. Analysts estimated that each week of closure removes a massive volume of oil and LNG from global markets. With OPEC+ spare capacity largely stranded behind the same bottleneck, there is no readily available mechanism for offsetting the lost supply. The combination of blocked existing exports and inaccessible spare capacity creates a supply squeeze with few historical precedents.
Oil markets responded immediately to the crisis. Brent crude climbed as much as 13% in early trading to reach $82 a barrel, the highest level in 14 months. Gas prices in Europe and the UK surged 40% or more. Shipping companies including Maersk suspended transits through the strait and the Suez Canal, further disrupting the flow of global trade. The International Maritime Organization urged vessels to avoid the region.
Energy analysts warned that if the strait remains closed for several weeks, oil prices could comfortably exceed $100 a barrel. At that level, the impact on the global economy would be significant — adding to inflation, depressing consumer confidence, and weighing on economic growth in energy-importing nations. The situation represents a stark reminder of how dependent the global economy remains on the free flow of energy through a handful of strategic maritime chokepoints.