Is a global crisis following the Strait of Hormuz shutdown?
Jesús Arturo Córdoba[i] , OBELA[ii]
The closure of the Strait of Hormuz has changed the global geopolitical landscape and international trade. With oil prices rising and a risk of global recession, countries are urgently seeking alternatives. This article examines how the Israel-US war against Iran has changed energy trade.
US President Donald Trump and Israeli Prime Minister Benjamin Netanyahu jointly organised a surprise attack on several strategic targets in Iran on 28 February 2026. The outbreak of war led to the assassination of Iran’s Supreme Leader, Ali Khamenei. This conflict, which US authorities boasted would last only 48 hours, has, in the absence of official justifications and a plan, continued for two months as of the date of writing. The result of the first attack on Iran was its counterattack on nine countries hosting US military bases, which also sparked the confrontation between Israel and Hezbollah, which escalated, on another front, in the Strait of Hormuz, between the US and Iran.
The Strait of Hormuz is the maritime link between the Persian Gulf and the Gulf of Oman, connecting to the Indian Ocean via the Arabian Sea. The three countries with exclusive maritime zones in the strait are Iran, Oman and, to a lesser extent, the United Arab Emirates. This is one of the world’s most important maritime trade routes (on a par with the Suez Canal, the Strait of Malacca, the Strait of Gibraltar, and the Taiwan Strait). The importance of Hormuz lies in its role in oil trade; nearly a fifth of the world’s oil passes through there every day.
The closure of the Strait of Hormuz by Iran brings global shipping to a standstill, with threats to sink vessels escalating tensions. Figure 1 highlights that more than 100 ships per day—including 15% of the world’s oil trade—are halted. Iran escalates further, imposing a yuan-only toll on passage. The US responds forcefully with a blockade, intercepting or attacking any ship that pays Iran’s toll.
The closure causes a loss of over 100 million barrels of crude oil per week. Over the two-month war, at $110 USD per barrel, $1.4 billion in oil trade has been lost alone. This figure does not include the military cost of the war.
Graph1 . Arrival of ships in the Strait of Hormuz (01/01/2026 – 26/04/2026)
Source: Retrieved from Portwatch IMFhttps://portwatch.imf.org/pages/cc317ba850e34c4dadbead6f7b336fb1
Figure 2 shows a country’s vulnerability to imports from the Arab world. The vertical axis shows the percentage of oil imports from the Persian Gulf. The horizontal axis marks the total oil imported by each country; wider bars mean greater volume. The bar color indicates how much oil imports contribute to GDP.
2 Chart – Vulnerability to energy imports from the Persian Gulf
Figure 2 allows us to assess the countries most affected, which include the Philippines, Vietnam, and Pakistan, as their imports of Arab oil account for over 80% of their total imports. China is also vulnerable to the war; around a third of its imports are from Arab countries. However, this percentage does not pose a risk compared to the countries mentioned above; the problem lies in the volume. Excluding the European Union (EU), China has the highest trade volume, suggesting high demand that may not be met. In terms of their share of GDP, South Korea and Thailand are highly energy-vulnerable, indicating a risk of oil price volatility. Despite the low proportion of Arab oil in the US and EU economies, the nearly 50% rise in global market prices is the primary driver of risk for the West: namely, high inflation accompanied by rising interest rates, followed by an economic recession, similar to what occurred during the Yom Kippur War (1973).
Asian countries have responded in different ways. Pakistan is trying to mediate a ceasefire between the warring nations. China has made agreements with Iran to let its ships enter its territory. South Korea and Japan have approached Brazil and Mexico to secure energy supplies.
The war in Iran highlights the vulnerability of the fossil fuel trade. Just as in past crises, inflation is rising in the US and Europe. In Asia, changes to product packaging and factory closures show the start of real effects from the Strait of Hormuz shutdown. If conflict continues, it could lead to a global crisis.
[i]SEHCTI Research Fellow, Faculty of Economics, UNAM.
[ii]Dr. Oscar Ugarteche, Dr. José Carlos Díaz Silva, Gabriela Ramírez, Nate Chávez
