Senior U.S. officials now estimate that a potential conflict involving Iran could last weeks rather than days as tensions in the Middle East intensify. Against this backdrop, the possibility of disruptions in the Strait of Hormuz is drawing attention in global oil and LNG markets.
Strategic Attacks And Escalating Risks
Recent developments highlight concerns about energy infrastructure in the Gulf region. Iranian forces have reportedly targeted several facilities, including Qatar’s Ras Laffan LNG complex, Saudi Arabia’s Ras Tanura refinery, and oil export terminals in Fujairah.
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The Strait of Hormuz remains open, but the risk of disruption has increased. The waterway handles roughly 20% of global oil shipments and about 25% of seaborne LNG exports, making it one of the most important energy transit routes in the world.
Rising Insurance Costs And Disrupted Shipping
Shipping risks have increased following warnings from Iran’s Revolutionary Guards Navy that the Strait may no longer be safe for commercial traffic. Reports of attacks near Oman have added to concerns among shipping companies and insurers.
Some marine insurers are reviewing war-risk coverage for vessels operating in the Gulf starting March 5. As a result, several tankers and LNG carriers have delayed voyages or altered routes, reducing traffic through the Strait.
Impact On Oil And LNG Prices
Energy markets have already reacted to the heightened tensions. Brent crude is trading near $84 per barrel, about $14 higher than at the beginning of the year. European gas benchmarks, including the Dutch TTF price, have risen to above €60 per MWh.
Previous disruptions in the region have demonstrated the sensitivity of commodity markets to supply risks. Prolonged instability could push oil prices above $100 per barrel and drive further volatility in LNG markets.
Disruptions In LNG And Oil Supplies
LNG shipments from the Gulf are primarily directed to Asian markets, which account for about 83% of regional LNG imports. Satellite tracking data show some vessels diverting or delaying transit near the Strait. A full blockade would significantly affect crude exports from the Gulf, with major importers such as China, India, Japan, and South Korea particularly exposed to supply disruptions.
Systemic Implications For Global Supply Chains
Beyond energy markets, higher shipping costs and rising insurance premiums could affect broader supply chains. Petrochemical trade and maritime logistics in the region are particularly sensitive to disruptions in Gulf shipping routes.
Over time, prolonged instability could also shift shipping activity toward larger tanker operators and regions with significant maritime fleets, including companies linked to Greek and Cypriot shipping interests.
Global markets are now closely monitoring developments in the Strait of Hormuz, a critical chokepoint for energy trade. The duration of regional tensions will determine the scale of the impact on energy prices, shipping costs, and global supply chains.
