{"id":124724,"date":"2026-05-21T13:38:10","date_gmt":"2026-05-21T13:38:10","guid":{"rendered":"https:\/\/www.europesays.com\/iran\/124724\/"},"modified":"2026-05-21T13:38:10","modified_gmt":"2026-05-21T13:38:10","slug":"report-warns-hormuz-closure-poses-single-greatest-threat-to-global-energy-markets","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/iran\/124724\/","title":{"rendered":"Report warns Hormuz closure poses single greatest threat to global energy markets"},"content":{"rendered":"

A prolonged closure of the Strait of Hormuz risks the single greatest global energy supply shock in decades,<\/a> according to a new report from Wood Mackenzie.<\/p>\n

As highlighted in the report \u201cStrait Talking: Iran War Scenarios and the Future of Energy\u201d, more than 11 million barrels per day (b\/d) of Gulf crude and condensate production is currently curtailed. Meanwhile, over 80 million tonnes per annum (Mtpa) of LNG supply, equivalent to around 20% of global supply, remains inaccessible to global markets.<\/p>\n

Wood Mackenzie has shared three distinct scenarios:<\/p>\n

Quick peace
\nSummer settlement and
\nExtended disruption<\/p>\n

\"Report<\/a>Each scenario offers a different timeline for ending the conflict and reopening the Strait and assesses the potential impact on oil and gas supply, prices, energy demand and the broader global economy.<\/p>\n

The Strait of Hormuz is the most critical chokepoint in global energy markets, and a prolonged closure would become far more than an energy crisis. The longer disruption persists, the greater the impact on energy prices, industrial activity, trade flows and global economic growth.<\/p>\n

\u2026said Peter Martin, Head of Economics at Wood Mackenzie.<\/p>\n

On the scenario of an extended disruption, the Strait remains largely closed through the end of 2026, with recurring tensions triggering periods of renewed conflict and sustained supply disruption.<\/p>\n

Wood Mackenzie\u2019s analysis indicates:<\/p>\n

Brent crude prices could approach US$200\/bbl by end-2026, despite global oil demand falling by 6 million b\/d year-on-year in H2 2026
\nMore than 11 million b\/d of crude and condensate production remains shut in and global oil inventories continue to decline. Diesel and jet fuel prices could rise towards US$300\/bbl in major refining centres by year end
\nThe global economy could contract by as much as 0.4% in 2026, marking the third global recession this century, with significant economic scarring
\nOil and gas importing countries could intensify efforts to reduce their import dependence by aggressively pursuing faster electrification<\/p>\n

The regional economic impact would be severe and uneven. The Middle East could see GDP contract by 10.7% in 2026, while EU27 GDP declines by 1.5% in 2026 and 0.5% in 2027. US GDP growth would fall below 1% in both years, while China\u2019s GDP growth slows to 3% in 2026.<\/p>\n

LNG market faces prolonged disruption<\/a> and structural change<\/p>\n

The report finds the global LNG market faces varying degrees of disruption under each of the three scenarios. Even under Quick Peace, LNG markets remain tight through summer 2027 as Gulf export facilities recover gradually and construction delays slow the next wave of supply growth from the region.<\/p>\n

A major global LNG expansion remains underway, with supply expected to increase by around 200 Mtpa by 2031, roughly 50% above current levels. The anticipated oversupply is delayed rather than eliminated.<\/p>\n

Wood Mackenzie expects US LNG cargo cancellations may eventually be required to rebalance the market, with European TTF prices in the early 2030s almost half of 2026 levels of around US$14\/mmbtu. Prices then stage a recovery through to 2035.<\/p>\n

Under the Extended Disruption scenario, the market outlook becomes significantly more severe.<\/p>\n

Some of the Gulf region\u2019s existing 85 Mtpa of LNG supply could be permanently lost, while around 75 Mtpa of capacity currently under construction faces multi-year delays. As a result, global LNG supply could be on average 70 Mtpa lower than expected before the conflict.<\/p>\n

A reshaped global energy landscape<\/p>\n

The war raises potentially significant risks for oil and LNG demand beyond 2030. Governments and producers have a range of options in response.<\/p>\n

Gulf oil and gas producers:\u00a0the region will remain a critical source of oil and gas for the foreseeable future. Producing countries will seek to mitigate risks to future supply. Developing infrastructure for oil exports to bypass the Strait of Hormuz and investment in storage closer to demand centres will increase energy security and prove lower cost than aggressive energy independence for importers. \u00a0
\nInternational oil and gas companies\u2019 Middle East strategies:\u00a0as other basins mature, including the Permian, the Middle East will remain increasingly crucial to the strategies of the Majors and larger Independents. Alternative egress routes would support investment.
\nOil and gas producers outside the Gulf:\u00a0low-cost producers in stable regions could expand output. LNG producers will look to capitalise on buyer interest in supply diversification.
\nRefiners in oil-importing countries:\u00a0refiners face a tougher market outlook as long-term oil demand weakens in import-dependent markets.
\nCleantech manufacturers:\u00a0as electrification accelerates, renewable and nuclear manufacturers and\u00a0electric vehicle (EV), battery and charging infrastructure producers stand to gain. But rapid electrification requires massive investment in grid development, with major cost implications.<\/p>\n

The consequences of an extended disruption would extend well beyond energy markets. It would test the resilience of global trade, industrial supply chains and economic growth simultaneously, reinforcing the urgency of achieving a resolution.<\/p>\n

\u2026Martin concluded.\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"A prolonged closure of the Strait of Hormuz risks the single greatest global energy supply shock in decades,…\n","protected":false},"author":2,"featured_media":121003,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[28],"tags":[102,196,263,261,6385,19885,101,2435],"class_list":["post-124724","post","type-post","status-publish","format-standard","has-post-thumbnail","category-strait-of-hormuz","tag-hormuz","tag-iran-war","tag-lng","tag-oil-prices","tag-reports","tag-shipping-market","tag-strait-of-hormuz","tag-trends"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@iran\/116612845134198252","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts\/124724","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/comments?post=124724"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts\/124724\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/media\/121003"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/media?parent=124724"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/categories?post=124724"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/tags?post=124724"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}