IEA warns Hormuz crisis could reshape global energy flows

Wednesday 22 - 14:20

By: Dakir Madiha

IEA warns Hormuz crisis could reshape global energy flows

The head of the International Energy Agency has warned that the disruption in the Strait of Hormuz may trigger lasting changes in global energy markets, even if the passage reopens. Executive director Fatih Birol said the era of heavy dependence on a single maritime chokepoint is nearing its end, adding that restoring stability could take at least two years.

The scale of the disruption is unprecedented in modern energy markets. The IEA described the situation as the largest supply shock in the history of the global oil market. Estimates indicate that Gulf producers halted around 7.5 million barrels per day in March alone as storage capacity reached limits. Daily disruptions have since climbed toward 13 million barrels, reflecting sustained pressure on supply chains following the closure of the strait by Iran after military escalation involving the United States and Israel.

The magnitude of the supply loss has drawn comparisons with the 1973 oil crisis. Analysts estimate that current disruptions have reached similar levels in less than two months, with around 10 million barrels per day affected while alternative routes compensate for only a fraction of that volume. The rapid pace of disruption underscores the vulnerability of global energy systems to concentrated transit routes.

Gulf states have accelerated efforts to bypass the chokepoint. Saudi Arabia has increased shipments through its East-West pipeline linking Abqaiq to the Red Sea port of Yanbu, raising capacity to nearly 3 million barrels per day. The United Arab Emirates has expanded flows through its pipeline connecting inland fields to Fujairah. Additional infrastructure projects are under development, including new export terminals and expanded pipeline networks aimed at reducing reliance on Hormuz.

Despite these efforts, alternative routes fall far short of replacing the roughly 20 million barrels per day that previously transited the strait. Member countries of the IEA have released about 400 million barrels from strategic reserves, a record drawdown intended to cushion immediate shortages. Officials stress that such reserves are designed for short-term disruptions and cannot offset a prolonged crisis.

Energy analysts increasingly view the situation as a structural shift rather than a temporary shock. Governments and companies are accelerating investments in diversified supply chains, extended shipping routes, and expanded storage capacity. The uncertainty surrounding maritime security and the continuation of the US naval blockade of Iranian ports has reinforced the urgency of these adjustments.

The crisis remains unresolved as ceasefire timelines approach and tensions persist. Industry leaders report limited clarity on when safe transit through Hormuz can resume. Current infrastructure decisions suggest that global energy markets are already adapting to a future less dependent on a single strategic corridor.