The Strait of Hormuz — the world’s most critical oil shipping chokepoint — has been effectively closed following the outbreak of war between the United States, Israel, and Iran in late February 2026. This closure has sent shockwaves through global shipping, energy markets, and international trade.
The Strait of Hormuz is a narrow waterway between Iran and the Sultanate of Oman, connecting the Persian Gulf to the Gulf of Oman. Approximately 20-21 million barrels of oil pass through it every day, representing roughly 20% of global petroleum liquids consumption. It is also a major route for liquefied natural gas (LNG) from Qatar and the UAE.
Following Iran’s retaliatory strikes and the escalation of conflict, tankers and shipping vessels have been forced to reroute, facing longer journeys around Africa via the Cape of Good Hope — adding weeks to delivery schedules and dramatically increasing shipping costs.
Japan’s shipping industry has halted Strait of Hormuz passage for its vessels. South Korea, which imports significant quantities of Middle Eastern oil, is also on high alert. European nations are scrambling for alternative energy supplies.
Impact on Global Trade:
- Energy prices have surged globally
- LNG supply to Europe and Asia is disrupted
- Shipping insurance rates have skyrocketed
- Container shipping costs are rising across the board
- Airlines are facing higher jet fuel costs
Singaporeans stranded in the Middle East reported rising costs as travel plans were thrown into chaos due to the airspace shutdown.
India, which sources nearly 60% of its oil from the Gulf region, is particularly vulnerable. The Indian government has activated emergency fuel reserve protocols and is in talks with Russia and other non-Gulf suppliers to diversify imports.
Experts warn that if the conflict continues, the global supply chain disruption could be worse than the COVID-19 pandemic’s impact on trade. The International Monetary Fund (IMF) has warned of potential downside risks to global growth.
The UN Security Council has convened emergency sessions to discuss the crisis, but with the US vetoing resolutions calling for a ceasefire, diplomatic options remain limited. The world watches with growing anxiety as one of the most critical maritime chokepoints in history remains effectively closed.