Following military strikes by the United States and Israel against Iran, maritime traffic through the critical Strait of Hormuz has been significantly disrupted. A number of vessels carrying oil and liquefied natural gas (LNG) have been unable or have chosen not to transit the strait.

Immediate Impact on Shipping

Data analytics firm Kpler reported that 14 ballast vessels destined for the strait have reversed course or stopped. Furthermore, Kpler identified at least four crude oil carriers—the Orbiter, Universal Victor, Mitake, and Trikwong Venture—that appear to be diverting away from the area. An insight manager for LNG at Kpler confirmed there is currently no LNG traffic moving through the strait, describing the impact as sizeable.

Strategic Importance and Market Consequences

The Strait of Hormuz is a vital chokepoint for global energy supplies, with approximately one-fifth of the world's oil and gas flowing through it. Any disruption to this shipping route would have an immediate effect on product availability and market prices. Analysis from Rystad Energy indicates that an effective halt of traffic would prevent 15 million barrels per day (bpd) of crude oil from reaching markets.

Limited Bypass Options and Supply Loss

While alternative infrastructure exists to bypass the strait, its capacity is limited. Saudi Arabia could redirect volumes via its East-West pipeline to the Red Sea, which has a capacity of about 5 million bpd. The United Arab Emirates could utilise the Abu Dhabi pipeline, with a capacity of around 1.5 million bpd. Despite these alternatives, the net impact of a closure would still be an effective loss of 8 to 10 million bpd of crude oil supply.

Potential Duration and Broader Implications

The most likely scenario for a closure of the Strait of Hormuz is that it would be temporary, potentially lasting one to two weeks. A prolonged closure would carry severe geopolitical consequences and likely provoke a rapid international response. However, even a short-lived disruption would create a significant logistical backlog for global energy markets.