The Strait of Hormuz Blockade: Which Countries Face the Greatest Energy Crisis

The Strait of Hormuz Blockade: Which Countries Face the Greatest Energy Crisis

March 3, 2026 — Iran has officially imposed a blockade on the Strait of Hormuz, a critical waterway that handles approximately 31% of all seaborne crude oil flows globally. A senior commander from Iran's Revolutionary Guard declared that the strait has been shut and warned that any vessel attempting to transit the waterway would be targeted.

Global Energy Markets in Turmoil

The closure of this strategic maritime artery has sent shock waves across global energy markets. The strait, located between Oman and Iran, functions as a vital lifeline for the world's oil trade. Roughly 13 million barrels per day passed through it in 2025.

"A prolonged closure of the strait would likely lead to a further surge in oil prices, with some analysts seeing oil crossing $100 per barrel."

Global benchmark Brent was already up 2.6% at around $80 per barrel — almost 10% higher since the conflict broke out. About 20% of global liquefied natural gas exports from the Persian Gulf are also at risk, primarily those originating from Qatar and shipped via the Strait of Hormuz.

South Asia: Immediate Physical Strain

South Asia would face the most acute disruption, particularly when it comes to supplies of LNG, according to energy analysts. Qatar and the United Arab Emirates account for 99% of Pakistan's LNG imports, 72% of Bangladesh's, and 53% of India's.

"Pakistan and Bangladesh have limited storage and procurement flexibility, meaning disruption would likely trigger fast power-sector demand destruction rather than aggressive spot bidding,"

Go Katayama, principal insight analyst at Kpler, noted that Bangladesh is already running a significant structural gas deficit, with a shortfall of more than 1,300 million cubic feet per day.

India's Dual Shock

India faces the largest combined exposure in the region. "More than half of its LNG imports are Gulf-linked, and a significant share is Brent-indexed, so a Hormuz-driven crude spike would simultaneously lift oil import costs and LNG contract prices. That creates a dual physical and financial shock," Kpler's Katayama explained.

Additionally, about 60% of India's oil imports come from the Middle East. A sustained blockade would amplify both energy import costs and current account pressures on the economy.

China: Large Exposure but Sufficient Buffer

The People's Republic of China is the world's largest crude oil importer and purchases more than 80% of Iranian oil. Around 30% of its LNG imports come from Qatar and the UAE, with roughly 40% of its oil imports passing through Hormuz.

"China is materially exposed but more flexible," noted Kpler's analyst.

China's LNG inventories stood at 7.6 million tons as of the end of February, providing short-term cover. However, if the outage persists, Beijing would need to compete for Atlantic cargoes if the outage persists, tightening the Pacific basin.

Japan and South Korea: Vulnerable to Supply Shocks

The Middle East supplies 75% of Japan's oil imports and around 70% of Korea's. Even without outright shortages, price effects could be severe. Economies with high energy import reliance such as Japan, South Korea, and Taiwan are more exposed to supply shocks.

Inventories are also limited. Korea holds about 3.5 million tons of LNG and Japan around 4.4 million tons in reserves, enough for roughly two to four weeks of stable demand.

Southeast Asia: Cost Inflation Reigns

Across much of Southeast Asia, the first-order hit is cost inflation rather than an immediate shortage. Spot-reliant LNG buyers would face sharply higher replacement costs as Asia competes with Europe for Atlantic cargoes.

"Thailand especially is a standout oil price loser in Nomura's framework because the external hit is large and immediate: it has the biggest net oil imports in Asia at 4.7% of GDP,"

This crisis demonstrates how geopolitical tensions in the Middle East continue to have profound ripple effects across the global energy landscape, with vulnerable economies facing unprecedented challenges in maintaining energy security.

The Road Ahead

As tensions escalate, the international community watches closely for any further developments. The blockade represents not just a regional crisis but a test of global economic resilience in an era of heightened energy insecurity.