How We Got Here
A conflict that escalated in days, with energy consequences lasting months.
Price Impacts: Before vs. Now
Commodity prices since the conflict began on February 28.
Scale of Supply Disruption
Strait of Hormuz flows: pre-war vs. current
Why the Strait of Hormuz Matters
At just 33km wide at its narrowest point, the Strait of Hormuz is the world’s most critical energy chokepoint. Before the conflict, approximately 20% of all global petroleum passed through it daily.
What’s Been Hit
Four energy markets in crisis simultaneously.
Crude Oil
Brent surged from $71 to $103/bbl in two weeks. Gulf producers have been forced to cut output by 10+ mb/d as storage fills and export routes are blocked. IEA released 400M barrels from strategic reserves — enough for ~20 days of disruption.
LNG / Natural Gas
Qatar’s Ras Laffan — the world’s largest LNG facility (20% of global output) — shut down completely after Iranian drone strikes. Asian spot LNG doubled to $25.40/MMBtu. European TTF gas spiked 63% in one day. Full restart will take weeks.
Shipping & Trade
Maersk, CMA CGM, and Hapag-Lloyd suspended all Strait of Hormuz transits. 150+ vessels anchored outside the strait. Combined with the ongoing Red Sea/Houthi disruption, two of the world’s key maritime chokepoints are now compromised.
Fertilizer & Agriculture
Gulf states produce 49% of global urea and 30% of ammonia exports. Urea prices have jumped 35%. With one-third of global fertilizer trade transiting the Strait, food security concerns are mounting across Asia and Africa.
Who’s Hit Hardest
70% of Strait of Hormuz crude flows to Asia.
China
Largest importer of Gulf crude. Facing acute supply shortage as ~40% of oil imports transited the Strait.
India
Heavily dependent on Gulf oil for refining. Diesel and petrol prices surging, inflationary pressure mounting.
Japan & South Korea
Near-total reliance on Gulf LNG and crude. Both activated strategic reserves.
Europe
Already strained from Russia decoupling. TTF gas up 57%. Diesel at €2/litre. Inflation fears rising.
United States
Less dependent on Gulf imports but gasoline up $0.43/week. SPR release underway. Consumer impact growing.
Scenarios: Where Could Prices Go?
Source: Goldman Sachs, IEA, analyst consensus. Nobel laureate Philippe Aghion warns a prolonged >$150 scenario would rival the 1973 oil crisis.
Emergency Response
What’s being done to stabilize markets.
IEA: 400M Barrel Release
32 member nations unanimously agreed to release 400 million barrels from strategic reserves — the largest coordinated release in IEA history. Analysts estimate this covers ~20 days of full Strait disruption.
US Navy Escorts Under Discussion
Trump proposed Navy escorts for commercial tankers. Energy Secretary Chris Wright said the US is “not ready” but operations could begin by end of March. The Pentagon has not confirmed operational plans.
Alternative Supply Routes
Saudi Arabia and UAE have limited bypass pipeline capacity, but it cannot replace the 20 mb/d that transited the Strait. Gulf producers are being forced to cut output as onshore storage fills up.