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Freedom251 › Blog › energy markets

How the Strait of Hormuz Affects Oil Prices and Fuel Supply

By Freedom251 Team · · 6 min read

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The Strait of Hormuz affects oil prices because it is a narrow route for a large share of the oil and gas shipped from Gulf producers to global buyers. Disruption can delay or strand cargoes and raise shipping costs; even the threat of disruption can push prices up before supplies stop moving.

Asian importers have the greatest direct exposure to Hormuz cargoes, but global markets transmit price effects more widely. The size of any change at the pump depends on local factors, so there is no single reliable forecast for how much gasoline or other fuel will cost in a given country.

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How much oil and gas normally passes through Hormuz?

Hormuz is a transit route, not an oil-producing source. It lies between Iran and Oman, connecting the Persian Gulf with the Gulf of Oman and the Arabian Sea. At its narrowest, the strait is 21 nautical miles (39 km) wide; its navigable channels are each about two miles (3.7 km) wide, separated by a two-mile buffer zone, according to the U.S. Energy Information Administration (EIA).

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Different institutional estimates use different time periods and measures. They should be read as separate snapshots, not combined into one supposedly exact current figure.

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Measure Reported flow What the figure represents
Total oil flows, first half of 2025 20.9 million barrels per day EIA estimate; about 20% of global petroleum-liquids consumption and one-quarter of global maritime oil trade.
Total oil flows, 2024 20.7 million barrels per day EIA estimate.
Crude oil and condensate, first half of 2025 14.7 million barrels per day EIA estimate.
Petroleum products, first half of 2025 6.1 million barrels per day EIA estimate, in addition to crude oil and condensate.
Total oil flows, 2025 20 million barrels per day on average International Energy Agency (IEA) estimate; around 25% of the world’s seaborne oil trade.
Crude oil and condensate, 2025 Nearly 15 million barrels per day IEA estimate; nearly 34% of global crude oil trade.
Oil products, 2025 Nearly 5 million barrels per day IEA estimate.
LNG, 2025 Just over 112 billion cubic metres IEA estimate; almost 20% of global LNG trade.

The EIA’s first-half 2025 and full-year 2025 IEA figures use different periods and methods. The EIA data are on its World Oil Transit Chokepoints page; the IEA figures are in its Strait of Hormuz 2026 Factsheet.

How does a disruption affect oil prices and fuel supply?

Prices can react to risk before a closure

Oil is traded in globally connected markets. If buyers and traders expect fewer cargoes or more difficult shipping, they can bid prices up before a physical interruption occurs. During regional tensions in June 2025, the EIA reported that Hormuz traffic had not been blocked, yet Brent crude rose from $69 per barrel on June 12 to $74 on June 13. That episode illustrates how risk can be priced in; it does not establish a typical price response or prove the strait alone caused the entire move. The EIA describes the role of chokepoint delays and shipping costs in its June 2025 assessment.

Interrupted transit can tighten physical supply

When ships cannot pass reliably, cargoes may be delayed, stranded or unavailable to their intended buyers. Producers that depend on Hormuz may be unable to deliver their usual volumes, while buyers compete for replacement supplies. Insurance, freight and longer or more complicated routes can add costs even when some oil continues to move. As the EIA explains, the inability to use a major chokepoint, even temporarily, can cause substantial supply delays and raise shipping costs, potentially increasing world energy prices.

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Crude, refined fuels and gas are affected differently

Hormuz carries both crude oil and finished petroleum products. A crude disruption can affect refineries’ access to feedstock; interruptions to products such as diesel, jet fuel or liquefied petroleum gas (LPG) can affect buyers more directly. Liquefied natural gas (LNG) is another separate cargo category: the IEA estimates that just over 112 billion cubic metres crossed the strait in 2025. In a headline or conversation, “gas” may mean gasoline, LPG or natural gas; the relevant supply effects differ.

The IEA’s 2026 report summary describes a more severe episode than the June 2025 example: it reported a near halt in traffic, crude prices above $100 per barrel and much higher prices for some refined products, particularly diesel, jet fuel and LPG. On March 11, 2026, the IEA also reported that member countries had made 400 million barrels of emergency oil reserves available to the market. These are conditions and actions reported at that time, not a permanent price level or a forecast. See the IEA’s Sheltering From Oil Shocks summary.

Why pump prices do not move by a fixed amount

Global crude and refined-product pressure does not translate into one universal gasoline-price increase. Retail prices vary with refinery supply, inventories, transport costs, taxes, currency exchange rates and government policy. The available estimates do not establish a country-specific pump-price change.

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Which countries are most exposed?

Asia receives most oil shipped through Hormuz, so Asian buyers have the largest direct exposure to cargo disruption. The IEA estimates that 80% of oil flows through the strait are destined for Asia. China and India together received 44% of 2025 Hormuz crude exports, and the IEA identifies Japan and South Korea as particularly reliant on these flows.

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A separate EIA assessment of 2024 flows found that 84% of crude oil and condensate and 83% of LNG transiting Hormuz went to Asian markets. China, India, Japan and South Korea together accounted for 69% of Hormuz crude oil and condensate flows that year. Those percentages describe 2024 destinations and should not be treated as current-year shares.

Direct cargo exposure is uneven, but price exposure is broader: the IEA says disruption can affect global markets immediately through pricing, even though most oil moving through the strait is bound for Asia. The destination estimates are in the IEA’s 2026 factsheet and the EIA’s June 2025 analysis.

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Can pipelines replace Hormuz shipments?

Saudi Arabia and the United Arab Emirates have routes that can carry crude around the strait, but their available export capacity is far smaller than normal Hormuz flows—and the capacity is not equivalent to guaranteed replacement supply.

Route or comparison Reported capacity or flow Important qualification
Saudi East-West pipeline, Abqaiq area to Yanbu on the Red Sea Saudi Arabia reported expanding the system to 7 million barrels per day in March 2025. Sustainable flows at that rate have not been tested; usable spare capacity depends on operating conditions and west-coast export capacity.
UAE Abu Dhabi Crude Oil Pipeline to Fujairah on the Gulf of Oman Capacity near 1.8 million barrels per day, with up to 700,000 barrels per day of additional room under the conditions assessed by the IEA. That additional room is conditional, not a guarantee of instantly deliverable exports.
Combined Saudi and UAE bypass routes IEA estimates 3.5–5.5 million barrels per day of available export capacity. Compare with nearly 20 million barrels per day of total oil exports through Hormuz in 2025; rerouting and export logistics have not been robustly tested at large scale.
Iranian Jask pipeline and terminal Reported design capacity of 1 million barrels per day. The IEA describes it as effectively non-operational as a viable crude-export option: a test cargo went out in late 2024, with no further export reported since. Its design capacity is not available bypass capacity.

The pipeline capacities and qualifications are from the IEA’s Strait of Hormuz 2026 Factsheet. Even where a pipeline can move crude, that does not mean the associated oil can immediately be loaded, exported and delivered in the same quantities as normal shipping through Hormuz.

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What is happening to Hormuz shipping now?

In its 2026 reporting, the IEA says the conflict that began on February 28, 2026, sharply disrupted shipping through the strait and describes traffic as near a halt. That is the strongest supported summary; it does not mean every tanker has stopped.

Exact current transit totals are difficult to establish. The IEA’s shipping monitor, last updated September 16, 2026, warns that AIS-based estimates are highly uncertain: ships may switch off their transponders, and GPS jamming and AIS spoofing have been reported. The monitor says measured traffic likely understates actual traffic. Its figures should not be treated as a complete count of transits or a settled measure of current flows. See the IEA Middle East Maritime Chokepoints Shipping Monitor.

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energy marketsfuel supplyoil pricesoil shippingStrait of Hormuz

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