The Strait of Hormuz is one of the most important shipping routes in the global energy system. It is the main pathway for oil, fuel products, and liquefied natural gas (LNG) exported from the Persian Gulf to the rest of the world. Under normal conditions, about 20 million barrels of oil and liquids per day move through the Strait of Hormuz, representing roughly one-fifth of global oil consumption and about a quarter of seaborne oil trade. Around 20% of global LNG trade transits the Strait of Hormuz, primarily from Qatar, making the passage a critical chokepoint not only for oil but also for global natural gas markets.
However, recent events have severely disrupted shipping through the strait. Energy flows have dropped dramatically, with estimates suggesting that only around 10% of normal volumes are currently moving through the passage. This represents a potential supply shock of more than 17 million barrels per day to global energy markets. Under normal conditions, about 30–35 tankers leave the Persian Gulf each day, carrying crude oil, refined fuels, LPG, and condensates to global markets. With tanker traffic sharply reduced, supply shortages are already affecting several energy product markets.
One of the first markets to feel the supply impact is diesel and jet fuel. Over the past decade, Middle Eastern refineries have expanded rapidly and now export large amounts of diesel to Europe and Asia. With exports through the Strait of Hormuz disrupted, supplies are tightening and diesel prices are rising in importing regions. Europe is particularly exposed because it relies heavily on imported jet fuel and diesel from the Gulf. Airlines operating in major international hubs across Europe and Asia are therefore facing the risk of higher fuel costs as aviation fuel becomes harder to secure.
Another major impact is emerging in petrochemical feedstocks, such as liquefied petroleum gas (LPG), natural gas liquids (NGLs), and condensates. Countries such as Iran and Qatar export large quantities of these products, which are used to produce plastics, fertilizers, and other chemical products. Petrochemical industries in China, South Korea, and Japan depend heavily on these imports. As shipments through the Strait of Hormuz have slowed, some petrochemical plants are facing tighter feedstock supplies. In some cases, facilities may need to reduce production or switch to more expensive alternative inputs such as naphtha.
Alternative export routes exist, but they cannot replace most of the lost supply. Pipelines designed to bypass the strait—such as Saudi Arabia’s East-West pipeline and the UAE’s Habshan-Fujairah pipeline—can handle fewer than about 4 million barrels per day, far below the roughly 20 million barrels per day that normally move through the strait. As a result, the majority of Gulf export capacity remains constrained.
Liquefied natural gas markets are also being affected. Qatar is one of the world’s largest LNG exporters, and a large portion of its shipments normally passes through the Strait of Hormuz. With shipping through the region disrupted, around one-fifth of global LNG supply flows are now at risk of interruption. Europe and Asia rely heavily on LNG imports for electricity generation and heating. As shipment availability becomes uncertain, buyers are increasingly competing for cargoes from alternative suppliers such as the United States and Australia, pushing natural gas prices higher.
The disruption in the Strait of Hormuz is already creating a major supply shock across global energy markets. The most immediate impacts are being felt in diesel, jet fuel, petrochemical feedstocks, and LNG supplies. The effects are particularly strong in Europe and Asia, which rely heavily on energy imports from the Persian Gulf. As long as tanker traffic through the strait remains constrained, energy markets are likely to remain tight, and price volatility could persist.
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