How much of the world's oil passes through the Strait of Hormuz?

Approximately 20 percent of global petroleum liquids — roughly 21 million barrels per day — transits the Strait of Hormuz, along with a significant share of global LNG. Countries like Japan, South Korea, and India source more than 65-70 percent of their oil through this route.

What are the alternative routes if the Strait of Hormuz stays closed?

Saudi Arabia's East-West pipeline and the UAE's Abu Dhabi Crude Oil Pipeline together can carry about 6.5 million barrels per day overland, bypassing the strait — covering roughly 30 percent of normal Hormuz throughput. Strategic reserve releases provide a short-term buffer of weeks, not months.

Why did oil prices fall on March 24 if the strait is still closed?

Prices fell about 10 percent as Trump announced a five-day delay on threatened strikes against Iran's power plants, reducing the immediate risk of further supply disruption. Brent crude settled around $100 — still $28 above its pre-war level — as markets priced in some probability of a negotiated resolution.

The Strait of Hormuz Is Almost Shut Down — He…

Since February 28, shipping through the Strait of Hormuz has nearly halted. Brent crude hit $118 before falling to $100; Japan and South Korea import 70% of their oil through the strait.

The Strait of Hormuz is 21 miles wide at its narrowest point. Through that gap flows roughly 20 percent of the world's petroleum liquids — about 21 million barrels per day — along with a significant share of global liquefied natural gas shipments. Since United States and Israeli forces launched strikes on Iranian nuclear and military facilities on February 28, Iran has used the strait as leverage, targeting vessels attempting transit and effectively bringing commercial shipping through the waterway to near zero. The economic consequences are only now becoming visible in their full scale.

The price signal was stark: Brent crude, the international benchmark, surged from $72 per barrel immediately before the war to $118 last week, a 64 percent spike in less than four weeks. Monday's partial relief rally — triggered by Trump's five-day pause on threatened strikes against Iranian power plants — pulled oil back to around $100. That is still $28 above the pre-war price, and analysts at Goldman Sachs and JPMorgan both warned Monday that $100 is not a floor if the strait remains functionally closed.

The countries most directly exposed are not the ones making the most headlines. South Korea and Japan together import roughly 70 percent of their oil through the Strait of Hormuz. India sources about 65 percent of its crude via the same route. European nations, though geographically distant, are downstream of an LNG market that relies heavily on Qatari exports that transit the strait. Qatar, the world's largest LNG exporter, has not yet curtailed shipments, but operators are adding massive war-risk premiums to voyage insurance, costs that will eventually feed into utility bills from Tokyo to Rotterdam.

Continue reading to see the full article

The Strait of Hormuz Is Almost Shut Down — Here's What That Means for the World

Key Takeaways

Frequently Asked Questions

The Strait of Hormuz Is Almost Shut Down — Here's What That Means for the World

Key Takeaways

Frequently Asked Questions

More in Breaking News