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ISLAMABAD: A severe disruption in the Strait of Hormuz has placed unprecedented pressure on the global energy and trade system, significantly affecting oil and liquefied natural gas (LNG) flows through one of the world’s most critical maritime chokepoints.
According to reports cited by the Atlantic Council, ‘Oil and Gas Journal’, the IMF, Qatar News Agency and other international sources, the crisis has emerged from major disruptions in the sea route that carries nearly 20pc of global oil trade and 25pc of LNG shipments. The situation has triggered sharp volatility in energy markets and widespread impacts across supply chains, food systems, industrial production and financial stability.
The reports indicate that daily oil production and transit have dropped by an estimated 13 million barrels, with disruptions affecting around 15 million barrels of crude oil and 5 million barrels of refined products that normally pass through the route. LNG trade has also been heavily impacted, with roughly one-quarter of global flows disrupted.
Economic losses have escalated rapidly. Gulf countries reportedly lost nearly $2 billion per day in revenue during March, while cumulative supply losses reached up to 400 million barrels of oil. Regional infrastructure damage is estimated at over $25 billion.
Energy markets reacted sharply, with Brent crude prices rising from around $100 to $118 per barrel. European gas prices surged by nearly 60pc, while fertiliser (urea) prices increased by 30pc and aluminum and phosphate prices rose by around 20pc.
Major exporters have been severely affected. Iraq’s oil exports reportedly fell from 3.6 million barrels per day to just 0.2–0.3 million barrels, while Qatar’s monthly revenues declined sharply. Kuwait and Bahrain also saw near-total disruption of exports.
Globally, more than one-third of fertiliser trade has been impacted, raising concerns of up to 18pc increases in food prices. Agricultural production costs have risen by approximately 20pc.
Major importing economies have also faced pressure. China, a key buyer of Gulf energy, has come under increased import strain, while India has seen disruptions to 40-50pc of its oil and LNG supply, contributing to inflationary pressure and higher energy costs.
In Europe, nearly 60pc of jet fuel supplies are linked to Gulf sources, while Japan and South Korea rely heavily on imported LNG and oil, pushing up industrial costs and energy prices. In Africa, fuel shortages have disrupted transport and agricultural activity.
Pakistan, Bangladesh, and several Middle Eastern countries have also experienced rising fiscal pressure due to increased energy subsidies and import costs. Global inflation risks have been projected to rise to 4.4pc, alongside capital outflows and higher borrowing costs. Analysts warn that the crisis is not merely a temporary shock but may signal a structural shift in the global energy system. Rising shipping costs, higher insurance premiums and efforts to identify alternative trade routes are already reshaping global supply chains and long-term energy strategies.
