The closure of the Strait of Hormuz is already pushing up oil and gasoline prices and creating ripple effects across global supply chains. The waterway links the Persian Gulf to world markets, and roughly 20% of global oil and liquefied natural gas normally flows through it. When that flow is constrained, higher energy costs feed slowly into production, transportation and logistics, raising costs at each step.
Early impacts are visible. Jet fuel supplies are tightening and diesel prices are rising across Asia. China ordered refineries to stop exporting fuel, creating shortages that have raised shipping costs for US imports such as consumer electronics and pharmaceuticals. Naphtha, a feedstock for plastics, packaging, solvents, textiles and pharmaceutical components, transits the strait in large volumes; roughly 85% of Middle Eastern polyethylene exports move through the corridor.
Other industries face different risks. Aluminum smelters depend on sustained low‑cost energy, and the Middle East supplied roughly 21% of US unwrought aluminum imports in 2025; higher energy prices can force capacity cuts or shutdowns. Fertilizer production relies on natural gas: Persian Gulf states account for one‑third of global urea exports and half of global sulfur exports, and urea prices at the New Orleans import hub have already climbed sharply.
The strait is a hard‑to‑replace choke point. Pipeline alternatives replace only a fraction of the 20 million barrels per day that normally transit the route, so volumes are constrained rather than easily rerouted. Ships that take longer routes raise fuel and labor costs, tie up vessels and containers, and increase inventory costs for shippers. Analysts note the last disruption on this scale was during the tanker wars of the late 1980s. The Iranian economy appears especially hard hit and unlikely to recover quickly after the war. For the United States, the Strategic Petroleum Reserve provides a buffer and domestic production has improved resilience, but broader system resilience remains limited.
Difficult words
- closure — the stopping of movement or operations
- ripple effect — a small event causing wider consequencesripple effects
- feedstock — raw material used to make industrial products
- smelter — factory where metal is extracted from oresmelters
- constrain — to limit or restrict movement or amountconstrained
- choke point — a narrow route that limits traffic flow
- resilience — ability of a system to recover quickly
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Discussion questions
- How might higher energy costs from a closed strait affect the price of everyday goods in your country? Give examples and reasons.
- What short-term and long-term actions could governments or companies take to reduce risks from choke points like the Strait of Hormuz?
- Do strategic reserves and increased domestic production make a country fully resilient to global energy disruptions? Why or why not?
