An analysis by Wood Mackenzie, an energy intelligence firm, indicates that a hypothetical closure of the Strait of Hormuz would precipitate the most significant energy supply disruption in decades. Such an event would render more than 80 million tonnes per annum (mtpa) of liquefied natural gas (LNG) inaccessible to global markets, representing approximately 20% of the world's total supply. Concurrently, over 11 million barrels per day (b/d) of crude oil and condensate from the Gulf region would face curtailment.
This scenario is projected to drive oil prices to an extreme high of $200 per barrel in the most severe outcome. The Strait of Hormuz is a critical chokepoint for global energy trade, and its disruption would have far-reaching economic consequences.
For freight forwarders and logistics operations managers, a closure of the Strait of Hormuz would introduce extreme volatility and risk. Shipping routes for LNG and crude oil would be severely impacted, leading to significant delays, rerouting requirements, and potentially astronomical increases in freight rates for energy-related cargo. Capacity for alternative routes would be strained, and war risk premiums for vessels operating near the region would likely skyrocket, making insurance costs prohibitive. Forwarders would need to immediately assess supply chain vulnerabilities for clients reliant on energy from the Gulf and explore contingency plans for alternative sourcing or transport modes, although options for such large volumes are limited.
