Strait of Hormuz: logistics and supply chain risks — what businesses need to know

In brief: The Strait of Hormuz, just 33 km wide at its narrowest point, accounts for around 20% of global oil flows and 30% of LNG. For several months, rising tensions involving Iran have created strategic uncertainty with very real impacts on energy prices, maritime insurance, and global supply chains. Here’s what it means for businesse

A chokepoint with global economic impact

On a map, the Strait of Hormuz looks like a simple gap between two landmasses. In reality, it is one of the most critical transit points in the global economy. Every day, between 17 and 21 million barrels of oil pass through it, along with a significant share of liquefied natural gas (LNG) exported from the Persian Gulf. This 56 km maritime corridor has now become a major geopolitical hotspot.

Who controls the Strait of Hormuz?

The answer is nuanced. Geographically, it is shared between Iran to the north and Oman to the south. Legally, it is not “owned” by any single state. International law governs its use and guarantees a fundamental principle: the right of transit passage. In other words, even during periods of tension, both commercial and military vessels are supposed to be able to move freely through it.

On paper, the rule is clear. At sea, it’s another story.

Iran’s strategy: creating uncertainty rather than blocking

In recent months, the strait has become a tool of strategic pressure. Iran is not necessarily seeking to formally close the passage—that would be an extreme move with immediate global consequences. Instead, it is playing a more subtle game: creating uncertainty.

Targeted attacks, threats, increased military presence… making the route risky is often enough to slow, divert, or discourage flows.

In maritime transport, perceived risk matters as much as actual risk. Shipowners do not need to see their vessels attacked to change course. One damaged hull can trigger the reconfiguration of an entire supply chain.

Naval mining perfectly illustrates this logic: low-cost, hard to detect, and requiring long, complex clearance operations—it creates persistent doubt. Navigation becomes a calculated decision, almost a risk-taking exercise.

Concrete impact on prices and supply chains

Even a partial disruption of the strait is enough to trigger cascading effects. Energy prices react almost instantly. Insurers adjust their terms and premiums. Transit times increase. And the entire global supply chain absorbs the shock.

In response, Western powers attempt to secure the area—but their capabilities are not unlimited. Mine-clearing operations, convoy escorts, and maintaining a deterrent presence all require time and significant resources, with no guarantee of zero risk.

What this means for businesses

For many companies, this may seem like a distant issue. It isn’t.

The Strait of Hormuz is a stark reminder of a frequently underestimated reality: certain logistics routes are extreme points of vulnerability. When a bottleneck tightens, the entire chain becomes unstable.

Understanding these dependencies, anticipating alternative scenarios, and integrating geopolitical risk into supply chain decisions are no longer concerns limited to governments or major oil companies. They are now operational challenges for any business exposed to energy flows or Gulf maritime routes.

FAQ

Who owns the Strait of Hormuz?
The strait is geographically shared between Iran and Oman. Legally, it is not owned by any state—international law guarantees freedom of transit passage for all vessels.

What is the impact of a closure of the Strait of Hormuz on oil prices?
Even a partial disruption is enough to trigger immediate increases in oil prices, adjustments in maritime insurance premiums, and longer delays across global supply chains.

What are the alternatives if the strait is blocked?
The main alternatives are the East-West Pipeline (Saudi Arabia, toward the Red Sea) and the Habshan–Fujairah pipeline (UAE, toward the Gulf of Oman). These routes are costly, limited in capacity, and cannot fully replace the volumes typically transiting through Hormuz.

How much oil transits through the Strait of Hormuz?
Around 20% of global oil and 30% of globally traded LNG pass through the strait each day—equivalent to approximately 17 to 21 million barrels per day.