Iran's Ace: If the Strait of Hormuz is blocked, will global energy be disrupted?

Strait of Hormuz: A Crisis Point on the Global Energy Lifeline

Every day, approximately 20 million barrels of crude oil are transported through the Strait of Hormuz, accounting for about 20% of the global daily oil demand. This narrow waterway is located between the Persian Gulf and the Gulf of Oman, strategically positioned, and is known as the "throat" of the global energy supply chain.

As regional tensions escalate, Iran has once again threatened to block the Strait of Hormuz, which could not only disrupt energy supplies but also trigger a surge in international oil prices, igniting a storm of global inflation and economic instability.

Middle Eastern oil exports account for 30% of the global total: risks concentrated in one strait.

According to statistics from the International Energy Agency (IEA) and the U.S. Energy Information Administration (EIA), Middle Eastern countries export about 30 million barrels of crude oil daily, accounting for 30% of the global daily demand of about 100 million barrels. Among them, nearly 70% must be transported through the Strait of Hormuz, making this waterway one of the most vulnerable energy chokepoints in the world.

Country Export Volume (Barrels/Day) Remarks Saudi Arabia About 7-8 million OPEC's largest exporter Iraq About 4-5 million Almost entirely reliant on Hormuz transport UAE About 2.5-3 million Partly bypassing the strait through bypass pipelines Kuwait About 2 million Export routes all go through Hormuz Iran About 1-1.5 million Mostly through secret transactions or small-scale bypass

Once the Strait of Hormuz is obstructed, at least 20 million barrels of oil and gas transportation will be interrupted daily, and the supply gap will be difficult to fill immediately.

Saudi Arabia and the UAE take a different path: pipelines rerouted to avoid risks

In order to reduce dependence on Hormuz, Saudi Arabia and the UAE are actively investing in alternative oil pipeline routes and backup port construction. Although the effectiveness is limited, it has indeed increased a certain degree of energy export flexibility.

East-West oil pipeline: Saudi Arabia's Yanbu solution has yet to reach its full potential.

Saudi Arabia's "East-West Pipeline" (Petroline) connects the Persian Gulf with the Red Sea port of Yanbu, with a designed capacity of 7 million barrels per day, making it the largest bypass scheme in operation today. However, for a long time, this pipeline has only operated at about half of its capacity. According to past statistics, there has been a supply gap of over 2.5 million barrels per day since 2006.

UAE Fujairah pipeline: capacity is still difficult to support the overall situation

The Abu Dhabi–Fujairah pipeline of the UAE spans approximately 250 miles, delivering oil directly to the Arabian Sea without passing through Hormuz. It has a daily capacity of about 1.6 million barrels and is paired with the Fujairah oil storage facility, which can store 70 million barrels. It is currently one of the most practical alternative routes, but it still appears somewhat insufficient in the face of overall demand.

Iran, Oman and the New Land Route Option: Many Detours but Limited Effect

The Ramlet Khelah border crossing between Saudi Arabia and Oman has been revitalized due to improved bilateral relations, with an increase in land transportation. However, due to terrain and infrastructure limitations, it can currently only handle general cargo containers and non-oil goods.

Iran activated the Goreh–Jask pipeline in 2021, with a designed capacity of approximately 300,000 barrels per day, exporting to the Gulf of Oman, theoretically bypassing Hormuz. However, due to political pressure and operational bottlenecks, the pipeline has not been used since September 2024.

If Hormuz is blocked, how will the global market react?

A blockade of the Strait of Hormuz would lead to supply disruptions, soaring insurance costs, and increased shipping risks. According to market estimates, oil prices could quickly surge above $100 per barrel, further increasing inflationary pressures and severely impacting import-dependent economies such as Europe, Japan, and India.

In addition, if the oil and gas facilities around the Strait of Hormuz are damaged, such as an attack on Saudi Arabia's Yanbu or the UAE's Fujairah port, the global supply disruption could last even longer.

Hormuz remains the "only point" of global energy.

Even though Middle Eastern countries are continuously diversifying their export routes, the overall alternative volume is still far from the daily scale of 20 million barrels in the Strait. If regional conflicts escalate in the future, or maritime transportation lines are attacked, the global energy market will still be extremely fragile and unable to withstand a prolonged blockade.

This also explains that even if oil-exporting countries intend to take a detour, Hormuz remains a vital artery for global energy. Any fluctuations not only affect oil prices but also the overall economic stability and geopolitical landscape.

This article Iran's Trump Card: If the Strait of Hormuz is Blocked, Will Global Energy Supply Be Disrupted? First appeared in Chain News ABMedia.