Strait of Hormuz: The Global Economy’s Critical Energy Choke Point

The de facto closure of the Strait of Hormuz following the U.S.-Iran war has created a critical disruption in the global economy, extending far beyond the immediate volatility of oil markets. As a primary maritime choke point, the strait’s closure has impacted a wide array of commodities essential for global manufacturing, agriculture, and the green energy transition.

Energy and Maritime Significance

The Strait of Hormuz serves as a narrow passage between the Persian Gulf and the Gulf of Oman, reaching a width of approximately 21 miles at its narrowest point. Because ships must follow narrow shipping lanes to navigate shallow waters, We see one of the world’s most critical maritime choke points.

In 2024 and early 2025, the strait carried roughly one-fifth of global oil and petroleum consumption, as well as a similar share of liquefied natural gas (LNG) trade. Major exporters utilizing this route include Saudi Arabia, Iraq, the United Arab Emirates, Kuwait, and Iran.

Following U.S. And Israeli attacks on Iran on February 28, 2026, Iran retaliated with attacks that effectively closed the strait. This resulted in a dramatic fall in ship traffic and caused worldwide oil prices to spike.

Impact on Non-Petroleum Commodities

While oil is the most prominent commodity affected, several other sectors are facing significant supply chain disruptions. Aluminum has emerged as one of the largest non-petroleum casualties of the conflict. In 2025, the Middle East accounted for approximately 21% of unwrought aluminum imports and 13% of wrought aluminum imports.

Rising aluminum prices are expected to increase input costs for construction, aerospace, and automotive manufacturing across Europe and the United States. Sulfur, which is a primary byproduct of energy production and a critical energy material, has been identified as one of the commodities impacted by the closure.

Other supply chains identified as vulnerable to the closure include:

• Fertilizer and agricultural flows
• Electronics and batteries
• Pharmaceuticals
• Rubber
• Sugar
• Asian-based garment manufacturing

Global Economic Responses and Risks

The economic ripple effects are global, as a sizable proportion of the oil and refined products—including diesel, gasoline, and jet fuel—traveling through the strait is destined for major Asian markets such as Japan, India, and China.

To mitigate the impact on energy markets, the International Energy Agency (IEA) took an unprecedented step on March 11, 2026, by announcing the release of 400 million barrels of oil from reserves.

While U.S. Military actions and insurance backstops have been employed to attempt to keep trade flowing, supply chain experts suggest that it would only take a few weeks for these disruptions to impact prices across a broad range of consumer and industrial products.

Strategic Implications

The current conflict has exposed the fragility of the global economy’s reliance on narrow maritime corridors. The ability to control the Strait of Hormuz has fundamentally altered the strategic landscape, as the waterway remains a keystone of international trade and energy security.