LONDON, July 7 — The attack on the Strait of Hormuz in late April sent a jolt through global energy markets that is still being felt. The strait is a critical chokepoint for the world’s oil, with about 20% of the world’s petroleum transiting it daily. When vessels came under fire on April 27, 2025, the response was immediate.
Brent crude oil prices rose by 3% to $92 per barrel. Shipping insurance premiums for vessels in the region spiked, a clear signal that underwriters saw the risk as suddenly real.
The International Energy Agency warned on April 28, 2025, that prolonged disruption could lead to a 5% reduction in global oil supply, potentially triggering a recession. Major importers are watching nervously. Japan, India, and South Korea all rely heavily on Strait shipments.
For them, this is not an abstract geopolitical contest. It is about whether refineries have crude to process and whether households can afford fuel.
The United States has indicated it may release strategic petroleum reserves to stabilize markets. That is a tool designed precisely for moments like this: a short-term buffer against supply shocks. But reserves are finite, and the mechanism only works if the disruption is brief.
What researchers found, intriguingly, is how quickly a single chokepoint can transmit shockwaves through the entire system. The science behind it is straightforward: when about 20% of daily global supply is at risk, prices rise everywhere, not just in the region. Tankers reroute.
Buyers scramble. The market finds a new equilibrium, but it is a higher and more fragile one.
For now, the question is whether the disruption will be contained. The IEA’s warning about a 5% supply cut was a worst-case scenario, but it was grounded in real logistics. A prolonged closure of the strait is not hypothetical.
It has happened before, during the Iran-Iraq war in the 1980s, and the consequences were severe. The coming weeks will show whether diplomacy and reserve releases are enough to prevent a deeper crisis.
The mechanism of global oil supply is finely balanced, and the Strait of Hormuz remains its most vulnerable point.
