Iran’s closure of the Strait of Hormuz threatens to cause a global energy shock. About 20% of the world’s oil and a large part of liquefied natural gas circulate through this maritime route, making any prolonged interruption a risk for the international economy.
The military tension in the Middle East opened a new front of concern for the global economy. Iran announced the closure of the Strait of Hormuzone of the most important maritime routes on the planet for energy trade. If this situation extends over time, the effects could be felt in oil prices, global inflation, international trade and global economic stability.
The strait connects the Persian Gulf with the Indian Ocean and functions as a true energy “bottleneck” of the planet. There they circulate between 17 and 20 million barrels of oil per daywhich is approximately equivalent to 20% of world crude oil consumption.
An oil price shock
The first visible consequence of the blockade is the immediate rise in energy prices.
In the first days of the crisis, Brent oil already registered strong increases and analysts warn that If the closure is prolonged, the barrel could exceed $100 and even approach $150. in an extreme scenario.
This occurs because the Persian Gulf region concentrates some of the largest exporters in the world: Saudi Arabia, the United Arab Emirates, Iraq, Kuwait, Qatar and Iran.
Most of its production depends on that maritime corridor to reach Asia, Europe and other markets.
Impact on global inflation
If the blockade continues for weeks or months, the effect would not be limited to the oil market.
Experts warn that it could generate a new global inflationary shocksimilar to what occurred after the Russian invasion of Ukraine in 2022.
This is because oil influences practically the entire economy: transportation, industrial production, food, fertilizers and global logistics.
When the energy goes up, The costs of almost all goods and services also rise..
Crisis in global maritime trade
The conflict also directly affects international transportation. Several shipping companies and oil companies began to avoid the area due to the risk of attackswhich left dozens of ships detained or diverting their routes.
If transit continues to be paralyzed, companies will have to: go around Africa, increase transportation times and pay more expensive war insurance.
This makes global trade more expensive and can generate delays in supply chains.
Risk of energy crisis in Europe and Asia
The countries most vulnerable to a prolonged lockdown are Europe and Asiawhich depend heavily on energy imports from the Gulf.
In addition to oil, the strait is also a key route for liquefied natural gas (LNG)especially that exported by Qatar, one of the main global suppliers.
A prolonged disruption could force these countries to: look for alternative suppliers, increase energy subsidies and accelerate strategic reserves.
Financial markets on alert
The crisis also impacts the markets. The tension in the region caused falls in international stock markets and strong financial volatilitywhile investors seek refuge in assets considered safe.
Analysts warn that if the conflict escalates or is prolonged it could generate: economic slowdown, a drop in global trade and new geopolitical tensions between powers.
A strategic point of the global energy system
The Strait of Hormuz is considered one of the most sensitive geopolitical points on the planet. Although it has been the scene of tensions for decades, it has never been closed for an extended period.
For this reason, the evolution of the conflict will be decisive for the world economy. If the blockage is resolved quickly, the impact could be limited. But If the crisis extends over time, the world could face a new energy and financial crisis.
