A spike in risks to global energy supply chains is anticipated amid escalating tensions in West Asia linked to the conflict involving Iran, particularly around the strategic Strait of Hormuz, according to a Goldman Sachs report.
The waterway remains one of the most critical chokepoints in global energy trade, with roughly one-fifth of the world’s oil supply and a significant share of liquefied natural gas (LNG) shipments passing through the strait, the report noted.
The Goldman Sachs report highlighted that nearly 20 million barrels per day of oil supply and about 19 per cent of global LNG trade typically transit the route, making it vital for energy-importing nations, especially in Asia. Countries such as China, India, Japan and South Korea depend heavily on shipments that pass through the strait.
Goldman Sachs said tanker traffic in the region has already shown early signs of disruption, with shipping companies, oil producers and insurers adopting a cautious stance following reports of damaged vessels. Some ships are also avoiding the route amid rising security concerns.
Markets have already begun factoring in geopolitical risks. According to the report, oil prices currently include an estimated risk premium of around USD 18 per barrel, reflecting the potential impact if flows through the Strait of Hormuz were halted for about a month. This estimate accounts for limited alternative pipeline capacity that could bypass the strait.
Even without direct damage to oil infrastructure, disruptions to maritime shipping alone could significantly affect supply chains. Goldman Sachs estimates that around 16 million barrels per day of oil flows could be disrupted in the event of a full closure of the strait.
The risks also extend to natural gas markets. Approximately 80 million tonnes per year of LNG exports, largely from Qatar, pass through the strait. A sustained disruption could tighten global gas supplies and potentially push European benchmark gas prices back to levels seen during the 2022 energy crisis.
Recent developments in the region have already slowed tanker movements and led to sharp increases in shipping insurance premiums and freight rates. Some vessels have reportedly begun avoiding the region, raising concerns about broader supply disruptions.
While global oil inventories and spare production capacity may provide a short-term buffer, the report warned that prolonged disruptions in the Gulf could trigger significant volatility in global energy markets and push up prices of oil, gas and refined products.
Market participants and policymakers are now closely monitoring tanker traffic through the Strait of Hormuz as well as diplomatic and military signals from the United States, Iran and Gulf nations to assess whether the situation remains temporary or evolves into a broader energy supply shock.