Analysis: Closure of the Strait of Hormuz Will Trigger the Most Severe Energy Supply Crisis in Decades

Odaily Planet Daily News Wood Mackenzie, in its new report, points out that a prolonged closure of the Strait of Hormuz would pose the greatest threat to global energy markets in decades. Currently, daily production of crude oil and condensate in the Gulf region has already decreased by over 11 million barrels. At the same time, more than 80 million tons of liquefied natural gas supply annually (accounting for about 20% of global supply) remain unable to enter the global market.

In its latest report, the agency presented three different scenarios: Rapid Peace, Summer Reconciliation, and Prolonged Disruption. Each scenario offers a different timeline for ending the conflict and reopening the strait, and assesses the potential impacts on oil and gas supply, prices, energy demand, and the broader global economy.

Peter Martin, the firm's head of economics, stated: "The Strait of Hormuz is the most critical chokepoint in the global energy market. If the strait were to be closed for an extended period, the impact would go far beyond an energy crisis. The longer the duration, the greater the impact on energy prices, industrial activity, trade flows, and global economic growth." (Jin Shi)