HIGH IMPACT

What is the Strait of Hormuz and why should I care?

Quick answer: It's a narrow waterway where 20% of the world's oil supply and billions of dollars in goods pass through daily. Its disruption is why gas prices, shipping, and food costs are rising worldwide.

Last updated: 2026-03-12

The World’s Most Important Chokepoint

The Strait of Hormuz is a narrow passage of water between Iran (to the north) and Oman/UAE (to the south). It is only 33 km (21 miles) wide at its narrowest point, and the shipping lanes are even narrower.

Every single day, approximately:

  • 21 million barrels of oil pass through (about 20% of global supply)
  • Billions of dollars in liquefied natural gas (LNG)
  • Hundreds of cargo ships carrying consumer goods between Asia, the Middle East, and Europe

Source: US Energy Information Administration

Why It Matters to You Personally

If you drive a car: The Strait’s disruption is the #1 reason gas prices are rising worldwide. When 20% of global oil can’t get to market, prices spike everywhere.

If you buy anything shipped from Asia: Many shipping routes pass through or near the Strait. Disruptions mean delays and higher prices on everything from electronics to furniture.

If you eat food: Rising oil prices increase the cost of growing, processing, and transporting food. These costs eventually reach grocery store prices.

If you heat your home: LNG exports from Qatar (the world’s largest LNG exporter) pass through the Strait. European and Asian natural gas prices are affected.

What Iran Has Said

Iran’s IRGC has stated that “not one litre of oil” will pass through the Strait of Hormuz while military operations continue, according to Al Jazeera (March 11, 2026). While a full blockade hasn’t been achieved, military activity has deterred most commercial shipping.

Can’t Ships Just Go Around?

Sort of. Ships can reroute around the Cape of Good Hope (southern Africa), but this adds:

  • 7-14 extra days of travel
  • Significantly higher fuel costs
  • Higher insurance premiums
  • More wear and logistics complexity

This is why prices are rising even for goods not directly blocked — the whole system is more expensive to operate.

Sources: US Energy Information Administration, Al Jazeera, Lloyd’s List, Reuters