MUSCAT, July 9 — For communities across Asia that depend on stable energy prices, the Strait of Hormuz has once again become a source of deep concern. This narrow waterway between Iran and Oman, connecting the Persian Gulf to the Gulf of Oman and the Arabian Sea, is the world’s most important oil chokepoint. According to the US Energy Information Administration, about 20% of global petroleum consumption passes through it daily.
In 2022, an estimated 21 million barrels per day of oil and liquefied natural gas transited the strait. That volume supplies not just the United States and Europe, but much of Asia — including major importers like Japan, South Korea, India, and the Philippines.
For families across the region, any disruption here means higher costs for fuel, transport, and electricity. Iran has threatened to block the strait in past conflicts, including during the Iran-Iraq War from 1980 to 1988 and again in tensions that flared in 2018 and 2019. During that latter period, attacks on tankers near the strait in June and September 2019 caused oil prices to spike by up to 15 percent.
The US Fifth Fleet, based in Bahrain, patrols these waters. A blockade would disrupt supplies from Saudi Arabia, Iraq, Kuwait, the United Arab Emirates, and Qatar — all of which rely on this route to export their crude.
The EIA has estimated that a prolonged closure could raise oil prices by 30 to 50 percent within weeks. That is not an abstract figure for a family in Manila or Jakarta filling up a scooter, or for a tricycle driver in Cebu whose daily earnings are eaten by fuel costs. It is a direct hit on household budgets.
On the current date, oil prices rose following a decline in the Dow Jones Industrial Average. The US Strategic Petroleum Reserve held about a certain level as of a recent date, down from a peak of 727 million barrels in 2010. The International Energy Agency coordinates emergency stock releases among its member nations, a system designed to cushion the blow of a major supply disruption.
What a blockade would mean for Asian economies
For countries like the Philippines, which imports nearly all of its oil, the Strait of Hormuz is not a distant geopolitical flashpoint — it is a pipeline to daily life. Japan and South Korea, among the world’s largest LNG importers, also depend heavily on this route. India, a growing economic power, sources a significant portion of its crude from the Gulf states that would be cut off.
The 2019 tanker attacks offer a recent, tangible example. When two tankers were damaged near the strait in June of that year, insurance premiums for vessels in the region soared, and shipping companies rerouted cargoes.
Oil prices jumped sharply. For Asian consumers, that translated into higher pump prices within weeks. The US Fifth Fleet, based in Bahrain, is the primary naval force tasked with keeping the strait open.
But a military response carries its own risks. Any escalation could draw in regional powers and disrupt shipping lanes even further.
Emergency reserves and the limits of stockpiles
The Strategic Petroleum Reserve is the United States’ emergency stockpile of crude oil, created after the 1973 oil embargo. Its peak was 727 million barrels in 2010. As of a recent date, it held a lower amount.
The IEA, which coordinates emergency stock releases among its 31 member countries, including Japan and South Korea, has a system for releasing reserves in the event of a major supply disruption. But these stockpiles are finite.
Analysts have noted that a prolonged closure of the strait — lasting weeks or months — would exhaust even the largest reserves. The EIA’s estimate of a 30 to 50 percent price increase within weeks underlines how quickly the global oil market would react. For Asian economies that are net importers of oil, the stakes are particularly high.
The region’s recovery from the pandemic-era economic slowdown has been uneven, and a sustained spike in energy costs would hit hardest those families already struggling with inflation. Closer to home, for communities across Southeast Asia, the Strait of Hormuz is a reminder of how interconnected the world’s energy system remains.
A decision made in Tehran or a naval patrol in the Gulf can alter the cost of a jeepney ride in Manila or a bowl of noodles in Jakarta. What to watch next: whether the current tensions escalate into a direct threat to close the strait, and how quickly the IEA and its member nations can coordinate a response. For now, the waterway remains open, but the risk — and the cost of that risk — hangs over every barrel that transits it.
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