TEHRAN, July 12 — The potential closure of the Strait of Hormuz is sending ripples of concern through global energy markets, with experts warning of severe economic consequences for communities across Asia that depend heavily on affordable petroleum imports. The narrow waterway, a vital artery for the world’s oil supply, saw about 17 million barrels per day—roughly 20% of global petroleum—transit through its waters in 2023, according to the U.S. Energy Information Administration. For families across the region, the stakes are immediate and personal.
The strait is the primary export route for some of the world’s largest oil producers, including Saudi Arabia, which pumped 10 million barrels per day in 2023, Iraq at 4.5 million bpd, Iran at 2.5 million bpd, Kuwait at 2.7 million bpd, and the United Arab Emirates at 3.5 million bpd. Any sustained disruption would directly impact the fuel prices that power everything from jeepneys in Manila to fishing boats in the Visayas, and from motorbikes in Jakarta to delivery trucks in Bangkok.
Alternative routes exist but offer limited relief. Saudi Arabia’s 1,200-kilometer East-West Pipeline has a capacity of 5 million barrels per day, far short of replacing the volume that passes through Hormuz. The Suez Canal provides another option, but its capacity is also constrained.
Analysts at Goldman Sachs estimated in 2024 that a full closure could push oil prices above $150 per barrel, a staggering increase from the 2023 average price of Brent crude oil, which stood at $82 per barrel.
History of disruption
The last major shock to global oil markets came in 2019, when attacks on Saudi Aramco facilities temporarily cut 5.7 million barrels per day from production, spiking prices by 15%. That event, while severe, was a temporary and targeted strike. A full blockade of the Strait of Hormuz would represent a far more systemic threat, cutting off the daily flow of millions of barrels at the source.
Closer to home, the impact would be felt across Asia’s rapidly growing economies. The Philippines, for instance, imports nearly all of its oil requirements, much of it from Middle Eastern suppliers that rely on the strait.
Higher fuel costs would translate directly into higher prices for transport, food, and electricity—hitting low-income families hardest. The same dynamic plays out across Indonesia, Vietnam, Thailand, and other nations in the region that lack domestic oil reserves.
Beyond oil: LNG at risk
The crisis is not limited to petroleum. The Strait of Hormuz is also a critical route for liquefied natural gas shipments. Qatar, one of the world’s largest LNG exporters, shipped 106 million tons in 2023, the vast majority of it through the strait.
For countries like Japan, South Korea, and the Philippines—which rely heavily on LNG for power generation—any disruption would compound the energy crunch, driving up electricity costs for households and businesses alike. The U.S. Strategic Petroleum Reserve held 375 million barrels as of March 2025, according to the Department of Energy, providing a buffer that could help stabilize markets in the event of a short-term disruption.
But analysts caution that such reserves are designed for emergencies, not prolonged blockades. The current U.S. administration faces the challenge of coordinating a global response to prevent a price spiral that could derail economic recovery across Asia.
What to watch next
In the coming weeks, all eyes will be on diplomatic efforts to de-escalate tensions in the region, as well as on any signs of increased naval patrols or alternative shipping arrangements. For millions of families across Asia, the price of a liter of fuel—and the cost of putting food on the table—may hinge on whether the world’s most critical oil chokepoint remains open or closes.
