Strait of Hormuz¶

Location: Between Oman and Iran, connecting the Persian Gulf to the Gulf of Oman and the Arabian Sea
Classification: Major strategic chokepoint — oil and LNG transit corridor
Status: Closed (provisional ceasefire since April 7, 2026)

Definition¶

The Strait of Hormuz is the world's most critical oil and LNG transit corridor, carrying roughly 20% of global oil supplies and 22% of global LNG trade through a channel approximately 21 miles wide at its narrowest point. It is the sole maritime exit for Persian Gulf oil exporters including Saudi Arabia, Iraq, Kuwait, UAE, Qatar, Bahrain, and Iran itself.

Key Facts¶

20 mbd — total oil volume transiting Hormuz in 2024 (ENTITIES.json)
27% of global maritime oil trade passes through Hormuz (ENTITIES.json)
22% of global LNG trade via Hormuz (ENTITIES.json)
~20% of Gulf oil as share of global oil supplies (ENTITIES.json)
80% of Gulf oil shipped to Asia — primarily China, India, South Korea, Japan (ENTITIES.json)
~130 ships/day — pre-conflict Hormuz transit volume (ENTITIES.json)
~6 ships/day — Hormuz March 2026 transit (ENTITIES.json, WTO AIS data) — a ~95% collapse
Never fully closed in modern history prior to February 28, 2026 (Dallas Fed)

Transit Collapse¶

On February 28, 2026, following U.S.-Israeli strikes on Iranian infrastructure, Iran effectively closed the Strait of Hormuz to commercial traffic. The WTO's AIS vessel tracking confirms outbound crude oil, LNG, and fertilizer shipments collapsed from ~130 ships/day to ~6 ships/day — a ~95% drop.

The closure is distinct from the CPC pipeline sabotage (Kazakhstan, 70% of Kazakh exports, 3-5 year repair timeline) — that pipeline damage persists independently of the Hormuz transit situation.

Hormuz and the 2026 Supply Shock¶

Metric	Pre-crisis	March 2026
Daily transits	~130 ships/day	~6 ships/day
Global oil supply impact	—	~9.1 mbd shut-in (April 2026)
Global oil supply share	—	~20% of global supply
LNG trade impact	—	22% of global LNG trade disrupted

The April 7, 2026 ceasefire introduced a provisional arrangement: Iranian management of the strait with a $2M/vessel transit fee to fund reconstruction. Commercial traffic remains severely depressed and the arrangement is fragile.

Geographic Significance¶

The strait is flanked by Iran to the north and Oman (via its Musandam peninsula) to the south. Its closure forces Gulf exporters to route through:
- Red Sea / Suez Canal (limited by Houthi/Red Sea security concerns)
- East-West Pipeline / Petroline to Yanbu, Saudi Arabia (5 mbd theoretical, ~2.4 mbd practical spare capacity — ENTITIES.json)
- Cape of Good Hope (longest route, adds 15+ days to Asia shipments)

None of these alternatives collectively compensate for the 20 mbd normally flowing through Hormuz.

Role in the Crisis¶

Hormuz is the central artery of the 2026 oil shock. Every Q1, Q2, and Q3 dimension traces back to this chokepoint:
- Q1 (supply depth): Hormuz closure = 9.1 mbd removed; ceasefire determines whether April peak is the ceiling
- Q2 (price impact): Hormuz duration determines whether WTI peaks at $98 (1-quarter), $115 (2-quarter), or $132 (3-quarter) per Dallas Fed
- Q3 (Europe exposure): Europe's structural shift to LNG (post-2022) created new exposure — 22% of global LNG via Hormuz

Sources¶

ENTITIES.json — quantities and transit data
Q1-SUPPLY-DESTRUCTION.md — closure mechanics and country-level shut-in data
Dallas Fed Hormuz Closure analysis (March 20, 2026)
WTO Strait of Hormuz Trade Tracker — AIS vessel tracking
UNCTAD Rapid Assessment #2