# Global Trade Related Articles

Will the Continued Shutdown of the Strait of Hormuz Trigger an Oil and Gas Supply Crisis?

The prolonged closure of the Strait of Hormuz, a critical global energy chokepoint, is evolving from a military conflict into a severe stress test for worldwide energy trade. Despite a ceasefire, transit remains minimal due to persistent threats from Iran, which uses drones, small boats, mines, and a new transit permit/fee system to effectively control the strait. Daily vessel traffic has plummeted from about 135 to under 10 ships, trapping over 1500 commercial vessels. The U.S. has initiated "Project Freedom" to escort ships, but Iran condemns it as a violation. The crisis is forcing a fundamental re-pricing of risk and cost for using this route, which normally carries about one-fifth of global oil and LNG supplies. Even if a political deal is reached, restoring full, trusted transit will be slow due to mine clearance needs, security concerns, and eroded market confidence. Major oil producers like Saudi Arabia are using alternative pipelines, but capacities are limited and routes are also vulnerable. Iran has signaled its intent to institutionalize control over the strait post-conflict, leveraging it as a geopolitical tool. The standoff underscores how Iran can paralyze this vital passage without a traditional navy, creating a lasting impact on global energy security and trade logistics.

marsbit05/08 16:15