Dubai: The Strait of Hormuz is a narrow waterway that connects the Persian Gulf with the Gulf of Oman to the southwest and from there with the open ocean, and it remains one of the most important strategic points of global energy. Despite its relatively small geographical size, about 20 million barrels of oil are transported through these waters every day, which is equal to approximately 20% of the global oil supply. In addition, large volumes of liquefied natural gas, mainly exported from Qatar and the United Arab Emirates, also pass through this route. These energy flows play a significant role in the energy supply of Asian countries, one of the fastest growing regions in the world - including China, Japan, India and South Korea. Any tension arising in the region immediately affects global energy prices, trade flows, and financial markets, causing a chain reaction of economic effects across several continents simultaneously.
According to Azeri-Press News Agency, the strategic importance of the Strait is not new. As early as the 15th-16th centuries, Portugal, the Ottoman Empire, and the Safavids competed for control over this route. During that period, the port city of Hormuz played an important role as a center that controlled trade flows between the Persian Gulf and the Indian Ocean. Today, although the geographical characteristics of the strait remain as important as before, the scale of its impact has now taken on a global character. Any disruption in oil and gas supplies immediately affects industrial activity, prices, and financial flows. For example, China receives approximately one-third of its imported oil through this route, and rising prices directly increase production costs, strengthen inflationary pressure, and affect the country's balance of payments. For Japan and South Korea, dependence on this route is around 25-28%, which affects electricity costs and industrial expenses. India, meanwhile, imports about 20% of i ts oil through this strait, and rising fuel prices lead to higher transportation costs, increased inflation, and a rise in the cost of the consumer basket. European countries, on the other hand, feel this impact more indirectly-through rising oil and gas prices that increase industrial production costs and strengthen inflationary pressures. Although the United States has domestic energy resources, it still faces indirect effects through changes in global energy prices and volatility in financial markets.
In recent months, rising tensions in the region have once again demonstrated how sensitive global energy markets are. As a result of the blockade of the Strait by Iran, the transportation of energy carriers sharply decreased, which led to a rapid increase in oil prices. As a result, the price of the benchmark Brent crude oil at some points approached nearly $120 per barrel. Insurance premiums for tankers increased significantly, many international companies temporarily suspended shipments, while alternative routes were able to compensate for only one quarter of the total volume that normally passes through the Strait of Hormuz. Existing maritime alternatives are limited in terms of infrastructure and are not capable of fully replacing the function of the strait. For this reason, the Strait of Hormuz is considered an essential and practically irreplaceable transit route for the global energy system.
Historical experience also shows that the world's economies are extremely sensitive to events occurring in this region. The oil crises of 1973 and 1979 demonstrated that a reduction in supply leads to a sharp increase in prices and long-term economic shocks. Today, dependence on the Persian Gulf region has increased even further: global trade chains have become more complex, energy demand is rising, and the fact that exports are carried out through a limited number of routes increases the vulnerability of the global economy. Even short-term disruptions lead to rising prices, increased production costs, changes in financial flows, and heightened volatility in stock markets.
The Strait of Hormuz has a serious impact not only on economic processes but also on the geopolitical landscape of the region. The dependence of Asian countries on this route for energy makes them particularly vulnerable to potential risks. The United States and the European Union, meanwhile, are compelled to shape their foreign policies by taking into account the possible consequences for global stability. The strait remains a vital energy artery through which oil and gas flows pass, and these flows directly affect the economic situation of both exporting and importing countries, the stability of regions, and the functioning of global financial systems. Its security is directly linked to the global economy, and any tension in the region immediately affects energy prices, supply chains, and international trade.
In terms of energy resources, the current situation may, to some extent, benefit oil and gas producers that are not directly connected with Middle Eastern logistics. This category includes countries such as Australia, the United States, Malaysia, Indonesia, and Russia. Certain economic advantages may also arise for Azerbaijan. The country's existing oil and gas infrastructure allows it to respond quickly to rising prices and expand supplies to foreign markets. In the short term, energy exporters located outside the conflict zone, including Russia, may obtain additional revenues due to reduced discounts and expanded share in Asian markets.
At the same time, Southeast Asian countries may also gain certain benefits in terms of tourism. Thus, against the backdrop of a decline in trips to the Middle East, the likelihood of tourist flows to that region is increasing. However, such crises essentially act as an additional 'tax' on global trade: logistics and energy costs rise, inflation accelerates, and the pace of economic growth weakens. Therefore, in the long term, the number of real beneficiaries will be limited and will mainly include countries that are able to quickly adapt their export routes and take advantage of rising prices.
Today, the Strait of Hormuz is no longer just a geographical object; it is considered a strategic barometer of the global economy. It is one of the key factors determining the dynamics of energy prices, the stability of supply, and the investment decisions of major players operating in global markets. Any change in transit conditions can create a domino effect, impacting energy companies, financial markets, the industrial sector, and ultimately consumers around the world. For this reason, the security and uninterrupted functioning of the strait are of vital importance for maintaining global economic stability and the predictability of international trade.