Strait of Hormuz: How The Strategic Flashpoint In The West Asia Conflict Is Roiling Global Oil Markets

By Voon Miaw Ping

KUALA LUMPUR, March 13 (Bernama) -- Intensifying maritime security tensions in the Strait of Hormuz amid the ongoing military conflict between the United States (US), Israel and Iran are putting the strategic chokepoint under intense international scrutiny.

Iran’s blockade of the strait in response to continued US-Israeli strikes on its territory has been further reinforced by Supreme Leader Mojtaba Khamenei, who, in his first public message on March 12, vowed to keep the Strait of Hormuz closed as “leverage against the US and Israel”.

The blockade, along with attacks on commercial vessels since the conflict began, has sparked serious concerns over the consequences of prolonged disruption for global oil and gas supplies.

Artery of Global Oil Supply

The Strait of Hormuz, known as the world's most important energy corridor, lies between Iran and Oman, linking the Persian Gulf with the Gulf of Oman and the Arabian Sea. 

Stretching about 167 kilometres long, just 33 kilometres wide at its narrowest point, and reaching a depth of 200 metres, the strait serves as the only sea route for Gulf producers to export vast volumes of oil and gas to international markets.

Roughly one-fifth of the world’s oil and liquefied natural gas supply (LNG) passes through the strait, underscoring its strategic importance as the world’s most critical chokepoint for global energy security.

According to the US Energy Information Administration (EIA), in 2024, about 20 million barrels of oil per day (bpd) transited the strait, with an estimated 84 per cent of the crude oil and condensate and 83 per cent of LNG transported going to Asian markets.

China was the biggest recipient with 5.4 million bpd, and together with other top destinations like India, Japan and South Korea, constituted about 69 per cent of total shipment. 

By comparison, only 0.5 million bpd of crude oil and condensate moved through the Strait of Hormuz to the US in 2024.

Given its importance, disruption along the route could create a global energy crisis, particularly in Asia, where countries rely heavily on oil and gas shipments through the strait for electricity generation and fuel supply.

Flashpoint of US-Israel-Iran Conflict 

Shipping traffic through the Strait of Hormuz has dropped sharply since the latest hostilities erupted on Feb 28, as Tehran, which controls the strait, blocked the waterway and threatened to target vessels linked to the US and Israel.

Data from Starboard Maritime Intelligence showed that an average of 153 vessels transited the strait daily in the week before the conflict, with traffic peaking at 188 vessels on Feb 17.

The number drastically dropped to only seven vessels on March 6 and down to three in recent days.

Britain’s maritime security agency, UKMTO, said that as of March 12, at least 16 vessels in or near the Strait of Hormuz had come under attack, and 20 reports of incidents affecting vessels in the area had been received. 

Prominent maritime commentator and analyst Nazery Khalid said Iran’s threats should not be dismissed, describing the recent attacks on vessels passing through the strait as part of Tehran’s strategy to influence global opinion about what he characterised as an unprovoked, unlawful attack on the republic. 

“It is obvious that Iran is not seeking to match the US-Israel military might but to fight an asymmetrical war on many fronts, including on strategic and economic fronts. 

“It is appearing more obvious by the day that the aggressors have grossly miscalculated Iran’s will, resolve and capability and could well pay a high price for their transgression as Iran continue to hit targets that could cause severe impacts to the economies of those attacking it and to the global economy,” he told Bernama.

Energy Supply Crunch Deepens 

Attacks on oil tankers traversing the Strait have already triggered a sharp increase in oil prices.

Oil prices jumped to nearly US$120 per barrel early this week following disruptions to production in Saudi Arabia and other Gulf countries, including Bahrain, Qatar and Kuwait, as energy infrastructure came under attack and ships were unable to pass through the Strait.

Iran has warned that oil prices could surge to US$200 a barrel if the conflict escalates further. 

The International Energy Agency (IEA), in its latest report, noted that the blockage of the Strait of Hormuz amid the conflict is creating the largest oil supply disruption in history, with global oil supply projected to fall by eight million bpd in March or eight per cent of world demand.

“Prolonged disruptions to its production, transportation and overall supply are obviously going to trigger adverse effects of seismic proportions, not only for the economies of Gulf oil-dependent countries but also the global economy as a whole,” Nazery said.

He said countries dependent on Gulf oil may have to introduce austerity measures to cushion the impacts of the current energy crisis.

“OPEC (Organisation of the Petroleum Exporting Countries) could do only so much to release stockpile to patch the loss of supply until its reserves reach critical levels. 

“Things could get as bad as the 1973 oil crisis when OPEC members slapped an oil embargo against the US and other nations supporting Israel during the Yom Kippur War.  This triggered massive cuts in supply, sending oil prices quadrupling and causing severe shortage of gasoline shortages,” he said. 

Alternative to Strait of Hormuz?

Amid the standoff, Saudi Arabia’s East-West Crude Oil Pipeline and the United Arab Emirates’ Abu Dhabi Crude Oil Pipeline have been thrust into the international spotlight, as they have emerged as a lifeline for transporting oil through the Red Sea to world markets.

However, Nazery said these pipelines cannot replace the vital role of the Strait of Hormuz.

“While the Saudi and UAE pipelines can be dubbed the ‘lifeline pipelines’, they provide nothing more than temporary relief to the Strait of Hormuz bottleneck and will soon reach maximum capacity.” 

“In other words, if the conflict prolongs, widens and escalates without any concrete prospect of a resolution soon, it would not be realistic to count upon the pipelines to help check the spiralling oil price and save the global economy from recession,” he said. 

Citing an example, he said Saudi Arabia exported 6.3 million bpd of crude and 1.4 million bpd of refined oil products in 2025, but the Yanbu terminal at the Red Sea can only handle around 4.5 million bpd of crude per day – a mere quarter of the daily volume shipped through the Strait.

Nazery also cautioned that transporting Gulf oil through the pipelines and ports along the Red Sea does not guarantee safe passage.

“Houthi rebel groups in Yemen, which are allied with Iran, could launch attacks on the pipelines and ships transiting the Red Sea.”

“This could be just as dangerous as attempting to sail fully laden oil tankers through the Strait of Hormuz, in defiance of Iran’s warning,” he added.

-- BERNAMA