Experts warn that the closure of the Strait of Hormuz, a strategically crucial chokepoint for global oil trade, would most severely affect Asian economies heavily dependent on Gulf oil, while the shock could trigger chain reactions across the global economy.
The Strait of Hormuz, through which an average of 20 million barrels of crude oil and petroleum products were transported daily last year, is one of the world's most critical oil transit points.
Around 25% of global seaborne oil trade passes through the Strait, and limited alternative routes mean that any disruption in flows via Hormuz could have major repercussions for global oil markets.
Guido Cozzi, macroeconomics professor at University of St. Gallen, told Anadolu that the countries most exposed to a closure are those heavily reliant on Gulf oil imports.
He noted that major Asian importers such as China, India, Japan, and South Korea would face significant short-term supply disruptions, while Europe could mitigate the impact due to its partial diversification toward US, Norwegian, and African supply.
"The US would be relatively less directly affected due to its increased domestic production, but global price effects would still transmit into the US economy," Cozzi said.
He explained that in the short term global oil markets typically respond with sharp price jumps due to risk premiums and precautionary stock behaviors, though he warned that even a temporary disruption could push Brent crude prices into double-digit increases.
He added that futures markets would price both immediate shortages and geopolitical uncertainty, amplifying volatility in energy and shipping markets. "Historical analogues include the 1973 oil embargo, the Iran–Iraq War in the 1980s (the so-called 'Tanker War'), and more recently the 2019 attacks on Saudi oil facilities. However, today's global oil market is more financially integrated, and speculative dynamics could amplify short-term price movements beyond the purely physical supply shock," Cozzi said.
He added that broader macroeconomic effects would depend on the duration of the Strait's closure. "A short disruption would primarily create inflationary pressure and increase transport and energy costs. A prolonged closure, however, could materially slow global growth, particularly in energy-importing emerging markets, and potentially force central banks to delay monetary easing in advanced economies," he said.
- 'Refiners will be competing with each other for limited supplies'
Alan Gelder, senior vice president of Refining, Chemicals and Oil Markets at Wood Mackenzie, said the Strait's closure caused a roughly 10% surge in oil prices on March 2, leading to a notable premium in refined products.
Gelder noted that the impact was felt more on the products side than on crude, due to crude prices having already risen in recent weeks amid US-Iran tensions, while refined product prices had not increased to the same extent.
Emphasizing that the Strait of Hormuz closure has a material impact on the availability of crude oil for the global refining sector, Gelder said: "A prolonged closure will result in high prices, as there is insufficient spare production capacity outside the Middle East region to satisfy demand, so refiners will be competing with each other for limited supplies."
A prolonged closure will result in the release of strategic stocks to try to mitigate the impact, but ultimately the global supply/demand balance would be met through high prices leading to demand destruction for a very prolonged closure, he explained.
"We do not envisage such a scenario as the US consumer is sensitive to high gasoline prices and these are often politically damaging to the incumbent US Administration, which has mid-term elections coming later this year," he said.
- Uncertainty persists for markets
Gelder added that long-term oil prices would depend on the course of the conflict, but short-term upward risks dominate.
With ship traffic through the Strait remaining limited, he expects prices to continue rising in the coming days and weeks. "If the Strait remains closed for two weeks, oil prices could reach $100 per barrel," he said.
He noted that if the Strait reopens, prices are expected to fall below current levels, mainly because non-OPEC supply growth in 2026 is projected to outpace global oil demand growth.
"Prices are lower still in 2027 given the over-supply situation continues. The range of uncertainties is large, as much depends upon the duration of the effective closure of the Strait, the impact of the conflict on Middle East energy assets and infrastructure, including Iranian supplies. Oil prices could be structurally higher for prolonged closure, which would drag on the global economy and oil demand growth," Gelder concluded.
By Ebru Sengul Cevrioglu
Anadolu Agency
energy@aa.com.tr
