Strait of Hormuz Blockade Disrupts Global Oil Supply Amid U.S.-Iran Conflict

The U.S.-Iran conflict, now approaching its one-month mark, has severely disrupted oil shipments through the Strait of Hormuz, a critical passageway for global energy supplies. Iran has threatened and executed attacks on vessels transiting the strait, leading to a sharp decline in maritime traffic. Shipping intelligence firm Kpler reports that daily transits have decreased by approximately 90% to 95% since the conflict began, with hundreds of tankers stranded in the Persian Gulf.

The cost of marine insurance for navigating the strait has escalated dramatically. Specialized insurance premiums have risen from a fraction of a percent to between 3.5% and 10% of a vessel's total value. Despite these increased costs, the primary deterrent for shipping companies remains the safety risks to their crews and vessels.

Oil prices have surged due to the supply disruption. The international benchmark, Brent crude, was trading at almost $113 per barrel as of Friday, marking an increase of over 50% from pre-war levels. This spike has led to higher gas prices in the U.S. and raised concerns about potential shortages in Asian countries heavily reliant on Middle Eastern oil.

The timeline for resolving the blockade remains uncertain. Secretary of State Marco Rubio indicated to G7 foreign ministers that the conflict could continue for another two to four weeks. He emphasized that while U.S. forces do not require assistance in reopening the strait, support from G7 nations in forming a maritime task force to secure the passage post-conflict would be beneficial.

Analysts suggest that a formal ceasefire or a significant reduction in hostilities is necessary before normal shipping operations can resume. Even with a ceasefire, it may take weeks or months for oil exports to return to previous levels, as producers would need to restart operations and ensure the safety of transit routes.