Strait of Hormuz closure risks greatest global energy supply shock in decades, Wood Mackenzie warns

A prolonged closure of the Strait of Hormuz poses the single greatest threat to global energy markets in decades, according to a new Horizons report from Wood Mackenzie, Strait Talking: Iran War Scenarios and the Future of Energy. More than 11 million barrels per day (b/d) of Gulf crude and condensate production is currently curtailed. Meanwhile, over 80 million tonnes per annum (Mtpa) of LNG supply, equivalent to around 20% of global supply, remains inaccessible to global markets.

In its new report, Wood Mackenzie has shared three distinct scenarios: Quick Peace, Summer Settlement and Extended Disruption. Each scenario offers a different timeline for ending the conflict and reopening the Strait and assesses the potential impact on oil and gas supply, prices, energy demand and the broader global economy.

“The Strait of Hormuz is the most critical chokepoint in global energy markets, and a prolonged closure would become far more than an energy crisis,” said Peter Martin, head of…