LONDON, July 13 — The United States Energy Information Administration has published a detailed assessment of the Strait of Hormuz, the narrow waterway through which roughly one-fifth of the world’s daily petroleum supply passes. The report arrives as the imposition of a 20% toll on cargo value transiting the strait has drawn international attention, a levy the EIA notes is unprecedented in scale.
According to the EIA, the strait handled 17 million barrels per day of petroleum and other liquids in 2023, a decline from 18.5 million bpd in 2018, a drop attributed to sanctions on Iran. The waterway also moves 77 million metric tons of liquefied natural gas annually, the vast majority originating from Qatar.
For all the noise about the new toll, the salient point may be its sheer magnitude. The EIA’s data notes that typical transit fees for the Suez Canal amount to roughly 0.5% of cargo value. The Strait of Hormuz toll of 20% represents a forty-fold increase in proportional cost.
The EIA estimates that if shipping costs deter some cargoes, global oil supply could be reduced by 1-2 million barrels per day.
Traffic and transit
The United Nations Conference on Trade and Development recorded approximately 20,000 vessels transiting the strait in 2023, including 5,000 oil tankers. The average transit time is 4-6 hours, according to the same data. The strait’s depth ranges from 100 to 200 feet — 30 to 60 metres — and the shipping lanes are two miles wide each, leaving little margin for error in one of the world’s most strategically vital chokepoints.
The EIA reports that 80% of oil moving through the strait heads to Asian markets, with China, India, Japan and South Korea the largest importers. Saudi Arabia’s crude oil exports through the strait averaged 7.5 million bpd in 2024, Iraq’s 3.4 million bpd, and Kuwait’s 2.1 million bpd.
Market implications
The potential reduction of 1-2 million bpd in global supply, should the toll prove a sufficient deterrent, would represent a non-trivial tightening of the market. The EIA’s figures make clear that the strait is not merely a transit route but the central artery for Asian energy security, particularly for the four largest importers named in the report.
The toll’s effect on LNG flows, predominantly from Qatar, remains to be quantified in the EIA’s assessment, though the 77 million metric tons of annual LNG traffic would face the same 20% levy on cargo value. It would seem that the economics of the entire energy trade through the strait are now subject to a cost structure without modern precedent.
