Editor’s note: Abulfaz Babazadeh is a scientist, a scholar of Japanese studies, a political observer, and a member of the Union of Journalists of Azerbaijan. The views expressed in this article are the author’s own and do not necessarily reflect those of News.Az.
A narrow waterway separating Iran from the Arabian Peninsula has once again demonstrated its capacity to disrupt the global economy. The Strait of Hormuz may be only about 33 kilometres wide at its narrowest point, but the consequences of instability there extend from oil terminals in the Persian Gulf to factories in Asia, petrol stations in Europe and household budgets around the world.
The latest figures illustrate the scale of the disruption. Before the current conflict, approximately 125 large commercial vessels passed through the strait every day. Over the most recent weekend, however, only around a dozen commodity-carrying ships were recorded making the journey, compared with 35 the previous weekend. On one particularly difficult day, the number reportedly fell to just four.
These figures should be treated with some caution because a growing number of tankers are switching off their automatic identification systems, or AIS transponders, to reduce the risk of detection and attack. Nevertheless, the overall trend is unmistakable: traffic through one of the world’s most important maritime chokepoints has slowed dramatically.
The Strait of Hormuz has long been described as the jugular vein of the global energy system. Roughly one-fifth of the world’s petroleum liquids and a similarly significant share of internationally traded liquefied natural gas normally pass through this narrow corridor. Saudi Arabia, Iraq, the United Arab Emirates, Kuwait, Qatar and Iran all depend on it to varying degrees.
The economies most exposed to a prolonged crisis are not necessarily located in the Middle East. The majority of the oil and gas transported through Hormuz is destined for Asian markets, particularly China, India, Japan and South Korea. For these countries, the strait is not a distant geopolitical concern. It is a vital artery supplying refineries, power plants, transport networks and industrial production.
Oil is flowing — but at an extraordinary price
The current situation does not amount to a complete closure of the strait. Oil is still moving, but the industry is being forced to adopt increasingly complex, expensive and risky methods to keep supplies flowing.
One such method involves using smaller shuttle tankers to carry crude from Gulf terminals through the strait before transferring it to very large crude carriers in comparatively safer waters off the coast of Oman. These ship-to-ship operations allow exporters to limit the amount of time that their most valuable vessels spend in the most dangerous area.
The arrangement has helped exports through Hormuz recover to around 6.5 million barrels per day. But maintaining this flow comes at an exceptionally high cost. Freight expenses on some routes have risen above $30 per barrel — more than a quarter of the value of the crude itself.
The daily cost of hiring some very large crude carriers has reportedly exceeded $1 million. Around 15 percent of the global VLCC fleet has effectively been removed from normal commercial circulation because vessels are being used for longer journeys, shuttle operations or ship-to-ship transfers.
This creates a dangerous paradox. Even if the market price of crude stabilises or falls, consumers may continue to pay more for fuel because the cost of delivering that oil has risen so sharply. The world may have enough petroleum in physical terms, but the infrastructure needed to transport it safely and affordably is under unprecedented pressure.
Brent crude recently traded at around $102 per barrel, while US West Texas Intermediate stood close to $98. Yet the headline price tells only part of the story. Insurance premiums, freight costs, security measures, delays and the risk of damage must all be added to the final cost paid by refiners and consumers.
A system with few genuine alternatives
For decades, Gulf energy producers have invested in pipelines and terminals designed to reduce their dependence on Hormuz. However, the crisis has revealed the limitations of those alternatives.
Saudi Arabia’s East-West Pipeline can carry crude from fields in the east of the kingdom to the Red Sea port of Yanbu. The United Arab Emirates operates a pipeline linking Abu Dhabi’s oilfields with Fujairah on the Gulf of Oman, allowing some exports to bypass the strait.
In theory, these routes provide strategic insurance. In practice, their capacity is insufficient to replace the enormous volumes normally shipped through Hormuz. They are also vulnerable to military attacks and technical disruptions.
Recent Houthi strikes on Saudi energy infrastructure have forced Riyadh to redirect more oil back through Hormuz. Saudi exports recovered to over four million barrels per day in September after falling to approximately 2.4 million barrels per day in August. But this recovery has increased pressure on the already strained tanker market.
During the week beginning 13 September, 18 tankers carrying approximately 34 million barrels of crude reportedly exited the strait. Saudi Arabia accounted for roughly half of that volume, while Iraq contributed about 35 percent.
The figures show both the adaptability and the fragility of the system. Producers are finding ways to keep oil moving, but every solution creates new bottlenecks, costs and security risks.
Sending vessels around the Cape of Good Hope offers no easy answer. Such diversions add thousands of kilometres to journeys, consume more fuel, increase carbon emissions and keep ships out of circulation for longer periods. At the same time, instability around the Bab el-Mandeb Strait and the Red Sea has weakened the reliability of another major maritime corridor.
The global economy is therefore confronting simultaneous pressure at two of its most important energy gateways: Hormuz in the east and Bab el-Mandeb in the west.
Asia faces the greatest immediate exposure
China is the largest buyer of Gulf oil and has built extensive commercial relationships with Iran, Saudi Arabia, Iraq and the UAE. India, Japan and South Korea also depend heavily on Middle Eastern crude and LNG.
Qatar’s position is particularly important. As one of the world’s largest exporters of liquefied natural gas, it must transport the overwhelming majority of its LNG shipments through Hormuz. Unlike oil, which can sometimes be redirected through pipelines, Qatar has no comparable large-scale alternative route for its gas exports.
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The Hormuz crisis is already affecting more than current energy deliveries. QatarEnergy has warned that difficulties importing critical equipment could delay elements of its North Field expansion projects, which are expected to begin production in 2027 and 2028. A maritime disruption today may therefore reduce the amount of gas available to international markets several years from now.
For Asian importers, the threat is not limited to higher oil prices. Increased energy costs affect electricity generation, manufacturing, fertiliser production, aviation and maritime transport. Export-oriented economies then pass part of that additional cost to consumers across the world.
Bangladesh, for example, has raised domestic fuel prices by as much as 17.4 percent amid rising international prices and shipping expenses. The country’s petroleum corporation reportedly lost approximately $1.9 billion between March and August. Similar pressures could emerge across other developing economies with limited foreign currency reserves and little capacity to subsidise energy indefinitely.
Europe cannot consider itself protected
Europe imports less Gulf oil through Hormuz than Asia, but it remains highly exposed to the secondary effects of the crisis.
Disrupted Middle Eastern supplies have contributed to a projected European jet-fuel deficit of around 510,000 barrels per day in the fourth quarter of 2026. Inventories in the Amsterdam-Rotterdam-Antwerp hub have fallen to their lowest level in seven years. Europe has consequently turned to suppliers as distant as South Korea, increasing both transport costs and journey times.
Higher shipping and aviation costs eventually feed into the prices of food, manufactured goods and travel. Inflationary pressure may therefore persist even if crude prices retreat from their peaks.
The crisis also exposes a deeper strategic problem. Europe has spent years diversifying away from excessive dependence on individual suppliers, particularly Russia. But replacing dependence on one producer with dependence on a handful of vulnerable sea lanes cannot provide genuine energy security.
This reality increases the importance of routes that do not pass through either Hormuz or the Red Sea. Energy supplies from the Caspian region, including Azerbaijan, are becoming more strategically valuable precisely because they reach European markets through a different geographical system.
The Southern Gas Corridor cannot replace all Middle Eastern or Russian supplies. Nevertheless, it offers Europe something increasingly precious: diversification not only of suppliers, but also of transportation routes. The same logic strengthens the importance of the Middle Corridor connecting Central Asia, the Caspian Sea, Azerbaijan, Georgia, Türkiye and Europe.
The world economy’s narrowest point
The Strait of Hormuz crisis carries a lesson extending far beyond the Middle East. In modern energy geopolitics, the decisive question is no longer simply who possesses oil and gas. It is whether those resources can be delivered securely, predictably and at an economically sustainable price.
A full physical closure of Hormuz is not necessary to destabilise markets. Mines, drone attacks, insurance restrictions, disabled navigation systems or even the credible threat of escalation can be enough to discourage shipowners and drive freight rates to extraordinary levels.
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The current workarounds demonstrate the ingenuity of the energy industry, but they should not be mistaken for a permanent solution. Transferring oil between ships off Oman, sending tankers around Africa and paying more than $1 million per day for a vessel may keep some supplies moving. They cannot restore normality.
Hormuz remains the global economy’s weakest link because an enormous share of the world’s energy is forced through a narrow and militarily exposed corridor for which no adequate substitute exists.
The strait may never be completely closed. It does not need to be. As the present crisis demonstrates, slowing the flow, multiplying the risks and raising the price of passage are already enough to make the entire world feel like a hostage.
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