Hormuz Strait Closure Poses Major Threat to Global Energy Market

A new report by Wood Mackenzie highlights that a prolonged closure of the Hormuz Strait could pose the greatest threat to the global energy market in decades. According to Odaily, the current daily production of crude oil and condensate in the Gulf region has decreased by over 11 million barrels. Additionally, more than 80 million tons of liquefied natural gas (LNG) annually, accounting for about 20% of global supply, remain inaccessible to the global market. The report outlines three scenarios: rapid peace, summer reconciliation, and long-term disruption. Each scenario provides a different timeline for ending the conflict and reopening the strait, assessing potential impacts on oil and gas supply, prices, energy demand, and the broader global economy. Peter Martin, the company's head of economics, stated, "The Hormuz Strait is the most critical chokepoint in the global energy market. A prolonged closure would have impacts far beyond an energy crisis. The longer the closure lasts, the greater the effects on energy prices, industrial activity, trade flows, and global economic growth."