Geographical location of the Strait of Hormuz. Source: Google Maps.
I. Strait Blockade: From Deterrence to Reality
“We will not allow a single drop of oil to flow out of the region,” said Iranian Islamic Revolutionary Guard Corps Commander Jabari in a televised address, a statement that has now become a harsh reality.
Unlike the verbal warnings of 2012 and 2018, this blockade has taken real effect. International tanker monitoring data shows that as of February 28, 2026, tanker speeds in the waters surrounding the Strait of Hormuz have generally dropped to zero.
Real-time data from ship tracking systems shows that the strait, where a giant oil tanker used to pass every 10 minutes, now has speeds generally reduced to zero.
More than 150 oil and gas tankers have either made emergency turns or anchored outside the Gulf of Oman to observe the situation.
Global shipping giants Maersk and Hapag-Lloyd issued announcements within hours, suspending all routes through the Strait of Hormuz.
01 Triple Impact: Why is this crisis unusual?
✅Shock 1: Physical Blockade Now a Reality
Mohammad Akbarzadeh, deputy commander of the Iranian Islamic Revolutionary Guard Corps Navy, stated that the Revolutionary Guard Navy had repeatedly warned that the Strait of Hormuz was under war and that any vessel could be hit by artillery shells or drones.
However, more than a dozen oil tankers ignored the warnings and have been hit and burned by artillery fire.
Data from energy data analytics company Vortexa shows that on March 1st, only four oil tankers passed through the Strait of Hormuz, three of which flew the Iranian flag.
Since January 2026, an average of 24 oil tankers have passed through daily.
✅Shock 2: Qatar’s LNG Production Halts
On March 2nd, Qatar Energy announced a production halt.
As an energy giant with an annual LNG production of 80 million tons, accounting for one-fifth of global supply, Qatar’s exports are entirely dependent on sea transport through the Strait of Hormuz, with no alternative pipelines available.
A chief energy analyst warned that while oil can still be routed via the Saudi-UAE land pipeline, Qatar’s LNG has nowhere to go. If the Strait of Hormuz remains closed for an extended period, the global gas market will face its most severe shortage since 2022.
✅Third Impact: Increased Production Unable to Fill the Gap
OPEC+ announced on March 1st that it would increase production by 206,000 barrels per day starting in April, but spare capacity is concentrated in the Middle East, and the Hormuz blockade makes it difficult to transport the oil.
Domestic scholars point out that the current problem is not a lack of oil, but a lack of transportation channels. If the increased oil production cannot be transported out, inventories will quickly fill up.
02 Asia bears the brunt: its energy lifeline is severed
The situation in the Strait of Hormuz is closely watched by many Asian countries, as the vast majority of oil transported through this narrow waterway ultimately ends up in Asia.
👉 Japan imports approximately 90% of its crude oil through the Strait of Hormuz. Experts at the Japan Energy Economics Research Institute calculate that for every $10 increase in oil prices, Japan will have to pay an additional 2 trillion yen in import costs.
If oil prices do reach $120, Japan’s annual energy import costs will increase by more than 10 trillion yen.
Japanese Prime Minister Sanae Takaichi stated before the House of Representatives Budget Committee that she will do everything possible to ensure the stability of Japan’s energy supply.
👉 South Korea imports over 70% of its oil and 20% of its natural gas from the Middle East. The South Korean government and shipping industry have activated their emergency response system, and the government has instructed more than 30 South Korean vessels to seek safe havens.
👉 The Gulf states account for approximately 50% of China’s annual crude oil imports, or about 280 million tons. Domestic scholars suggest increasing imports from non-Gulf regions, such as Russia, Canada, Africa, and South America, to compensate for this shortfall as much as possible. At a regular press conference held by the Chinese Foreign Ministry on March 3, spokesperson Mao Ning stated that energy security is crucial to the global economy, and all parties have a responsibility to ensure a stable and unimpeded energy supply. China urges all parties to immediately cease military operations and avoid escalating tensions.
03 Global Impact: The Chain Reaction from Oil Prices to Inflation
On March 2nd, Brent and WTI crude oil prices jumped 13% and 12% respectively at the open, reaching intraday highs of $82.37/barrel and $75.33/barrel, the highest levels since July 30, 2025.
On the same day, more than ten Chinese oil-related stocks and oil ETFs all hit their daily limit.
Jorge León, a geopolitical analyst at Rystad Energy, stated that although alternative solutions could be used, the closure would still result in a reduction of 8 to 10 million barrels of oil supply per day, representing approximately 8% to 10% of global daily oil demand of 100 million barrels.
Antoine Half, a researcher at Columbia University’s Center for Global Energy Policy, pointed out that if the closure continues, oil prices will rise quite rapidly.
The real question is how long the Strait of Hormuz will remain closed, which is crucial for too many large economies.
04 Limited Alternatives: Onshore Pipelines Are Inadequate
Major oil-producing countries in the region, both on the Iranian and Arab sides, are redeploying some oil supplies to bypass the Strait of Hormuz.
However, this bypass capacity is limited and not large in scale.
The International Energy Agency estimates that current overland oil transport capacity is only 4.2 million barrels per day.
Saudi Arabia’s East-West Pipeline leads to the Red Sea, and the UAE’s Abu Dhabi Oil Pipeline leads to Fujairah.
JPMorgan analysts say that if the conflict escalates and the Strait of Hormuz is effectively closed for more than 25 days, major Middle Eastern oil producers may be forced to suspend oil production.
The seven Gulf oil-producing countries, including Iraq, Kuwait, Qatar, Oman, and Iran, have approximately 343 million barrels of available onshore oil storage capacity, equivalent to 22 days of oil production stranded due to transport disruptions.
05 The logic of energy security has been rewritten: the strategic rise of clean energy.
Domestic scholars analyze that if the turmoil in the Middle East continues, some countries may temporarily halt their radical phase-out of coal and oil, increasing the development of their domestic traditional energy sources; however, high oil prices will also enhance the economic viability of photovoltaics, wind power, energy storage, and new energy vehicles.
This contradictory phenomenon reveals the essence: energy security is redefining the path of transformation.
In peacetime, energy systems pursue maximum efficiency—lowest cost, optimal configuration, and highest utilization rate.
Globalized trade and centralized power generation have built a highly interconnected energy network.
War has exposed the vulnerability of this system: sea lanes, pipelines, ports, and large power plants have all become risk nodes.
When efficiency gives way to survival, “resilience”—the system’s ability to maintain basic operation under shocks—becomes a core indicator.
Energy storage is transforming from an “economic tool” to a “safety asset.” Although the photovoltaic industry faces short-term pressure from soaring logistics costs and rising auxiliary material prices, the demand for energy self-sufficiency will accelerate photovoltaic installations.
When fossil fuel supply is constrained by geopolitical conflicts, distributed photovoltaics become a “risk-mitigation” option for national energy security.
II. The Lifeline of Global Energy Security
01 An irreplaceable energy channel
The Strait of Hormuz is the only sea passage from the Persian Gulf to the Indian Ocean, handling approximately 20% of global oil shipments (about 20 million barrels per day) and 20% of liquefied natural gas (LNG) trade.
Major oil-producing countries in the Middle East, including Saudi Arabia, Iraq, the UAE, and Qatar, rely on this strait for over 90% of their oil and gas exports, with Qatar’s LNG exports almost entirely dependent on this passage.
Energy transportation has long been vulnerable.
The strait is only 33 kilometers wide at its narrowest point, and the deep-water channel is only 3 kilometers wide. This extremely narrow geographical feature makes it inherently vulnerable to military blockade.
The International Maritime Organization has designated two one-way main channels here, each only 1 nautical mile (approximately 1.85 kilometers) wide, with a 1.4-nautical-mile buffer zone in between. Very large oil tankers can only pass cautiously through the central deep-water channel.
III. The Eye of the Geopolitical Storm
01 Iran’s Strategic Trump Card
The northern shore of the Strait of Hormuz is entirely controlled by Iran. Its narrow waterway and dense network of islands allow Iran to deploy missiles, speedboats, and other forces, almost completely covering the waterway and creating a natural military deterrent.
Closing the Strait of Hormuz is considered Iran’s “economic nuclear option” in response to external pressure. Although this means Iran would lose more than $100 million in export revenue daily, this “lose-lose” strategy could become its most powerful asymmetric countermeasure in extreme circumstances.
02 The Focus of Great Power Competition
The United States has long considered ensuring freedom of navigation in the Strait of Hormuz a core national interest and maintains a strong naval presence there (with the Fifth Fleet based in Bahrain) to deter Iran, combat piracy, and ensure energy supplies for its allies.
Major energy-consuming and trading nations such as the European Union, China, India, and Japan all have significant economic and strategic interests in the region, making the situation in the Strait highly interconnected and impactful.
IV. Economic Ripples: From Oil Prices to Vegetable Prices
01 The direct impact of soaring oil prices
Following Iran’s announcement on February 28, 2026, that it would close the Strait of Hormuz, Brent crude oil futures prices in London surged by as much as 13%, reaching over $82 per barrel.
Analysts generally predict that if the blockade continues, oil prices could soar to $120-150 per barrel.
Rising oil prices directly increase travel and logistics costs. Domestic refined oil prices are expected to rise, potentially costing private car drivers 20-50 yuan more to fill up their tanks, and increasing ride-hailing drivers’ monthly fuel expenses by several hundred yuan.
02 Transmission of Inflationary Pressures
Logistics costs have increased by 15%-20% due to rising oil prices, leading to a quiet increase in the prices of end consumers such as vegetables and food.
This imported inflationary pressure will make everyone’s “grocery basket” heavier.
The direct increase in production costs in industries such as chemicals, plastics, automobiles, and fertilizers will thin the profits of export-oriented companies, potentially leading to production cuts, layoffs, and impacting employment.
VI. To Replace or Not to Replace? Uncertainty about the Future
01 Historical Threats of Blockade
During the Iran-Iraq War (1980-1988), Iran repeatedly threatened to close the Strait of Hormuz, and in 1987 laid mines and attacked oil tankers in the area, causing oil prices to rise from over $30 per barrel to over $45 per barrel.
After the United States withdrew from the Iran nuclear deal in 2018, Iran stated its ability to disrupt oil shipments through the Strait of Hormuz. In July of that year, Iran detained a British oil tanker in the Strait of Hormuz, pushing up oil prices slightly.
Breaking free from dependence is a long-term battle in reality.
As the global energy transition accelerates and dependence on fossil fuels declines over the long term, the Strait of Hormuz’s absolute strategic importance may gradually diminish, but this will take decades.
Some countries are seeking alternative routes, such as the UAE’s oil pipeline through the port of Fujairah, and Saudi Arabia’s plans to build an East-West pipeline across the peninsula, but none of these can completely replace the Strait of Hormuz in terms of scale.
