SINGAPORE, July 12 — The potential closure of the Strait of Hormuz is sending tremors through global energy markets, with analysts warning that the disruption could cut off roughly 21% of the world’s daily oil consumption. The narrow waterway, a critical chokepoint for petroleum shipments, sees about 21 million barrels of oil pass through each day, according to 2022 data from the U.S. Energy Information Administration.
The stakes are enormous for communities across Asia, where fuel-importing nations from Japan to the Philippines depend heavily on the steady flow of crude from the Middle East. For families across the region, any sustained price spike would mean higher costs not just at the pump, but for nearly every good transported by road, sea, or air.
Key oil benchmarks are expected to react sharply. History offers a sobering precedent: in 2019, after attacks on Saudi Aramco’s facilities at Abqaiq and Khurais, Brent crude jumped 15% in a single day. During the 1990-1991 Gulf War, oil prices doubled from $15 to $30 per barrel.
Should the strait close, the initial price surge could be even more dramatic.
Strategic reserves and spare capacity
The United States maintains a Strategic Petroleum Reserve holding about 375 million barrels as of early 2025, down from 638 million barrels in 2020. Japan holds 470 million barrels in its own strategic reserves. The International Energy Agency requires member nations to hold the equivalent of 90 days of net oil imports, providing a potential buffer for the most vulnerable economies.
Closer to home, these reserves offer some reassurance, but they are not infinite. The U.S. reserve alone has been drawn down significantly in recent years, and a prolonged closure would test the limits of global stockpiles.
Saudi Arabia retains spare production capacity of about 2 to 3 million barrels per day, but that alone cannot fully replace the volume lost if the Strait of Hormuz is shut. The kingdom’s East-West Pipeline, with a capacity of 5 million barrels per day, and the UAE’s Habshan-Fujairah pipeline, with a capacity of 1.5 million barrels per day, offer alternative routes — but they bypass only part of the strait, not the entire chokepoint.
What to watch next
The U.S. Energy Information Administration and the International Energy Agency have both issued statements monitoring the situation. For now, markets are watching for any diplomatic moves or military posturing that could either ease tensions or accelerate a crisis. For families across Asia, the question is whether the world’s emergency systems — strategic reserves, spare capacity, and alternative pipelines — can hold the line long enough to prevent a full-blown price shock.
The answer may determine how deep the impact reaches into everyday life, from the cost of a commute to the price of food on the table.
Sources
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