Strait of Hormuz Closure Could Trigger Worst Energy Supply Shock in Decades, Analysts Warn

## Strait of Hormuz Closure Poses Catastrophic Risk to Global Energy Markets A closure of the Strait of Hormuz would represent the most severe energy supply disruption in decades, with oil prices potentially surging to $200 per barrel and more than 80 million tonnes per annum (mtpa) of liquefied natural gas supply cut off from global markets, according to analysis from Wood Mackenzie. The warning underscores the critical strategic importance of the narrow waterway connecting the Persian Gulf to the Gulf of Oman, through which approximately one-fifth of the world's LNG supply currently transits. Any sustained interruption to traffic through the strait would send immediate shockwaves across global energy commodity markets already operating under tight supply conditions. ### Scale of the Potential Disruption According to Wood Mackenzie, the 80-plus mtpa of LNG that passes through the Strait of Hormuz represents roughly 20% of total global LNG supply. Major producing nations including Qatar — the world's largest LNG exporter — rely on the strait as their primary export route. A closure would effectively strand this supply, leaving European and Asian buyers scrambling for alternative sources in an already constrained market. On the crude oil side, the strait handles an estimated 20-21 million barrels per day of petroleum liquids, accounting for roughly 20% of global oil trade. Analysts note that the combination of tight LNG markets and reduced crude availability could create a compounding price shock, with the $200-per-barrel scenario representing a worst-case but plausible outcome under a prolonged closure. ### Implications for Shipping and Trade For the maritime industry, a Hormuz closure would have far-reaching consequences beyond energy pricing. LNG tanker operators, VLCC owners, and product tanker fleets would face immediate route disruptions, with vessels potentially forced into lengthy diversions around the Arabian Peninsula or idled pending resolution of any conflict or blockade. Insurance premiums for vessels operating in the region would be expected to spike sharply, as war risk underwriters reassess exposure. Port operators and terminal managers across the Middle East Gulf region would also face significant operational uncertainty. The scenario serves as a stark reminder of the maritime chokepoints that underpin global energy security. The Strait of Hormuz, just 21 nautical miles wide at its narrowest point, remains one of the most strategically sensitive waterways in the world, and any threat to its navigability commands immediate attention from shipowners, charterers, energy traders, and governments alike. Industry stakeholders are advised to monitor developments closely and review contingency routing plans in light of the risk assessment published by Wood Mackenzie.