Disruptions at the Strait of Hormuz highlight the recurring risks posed by critical chokepoints in the global oil and gas system, even during periods of low prices and oversupply, according to a new analysis by energy think tank E3G. The report warns that supply disruptions at key transit routes can quickly ripple through global markets and underscores how even localized tensions can trigger widespread volatility in interconnected energy systems.
The analysis shows that more supply of oil and LNG does not necessarily translate into greater energy security due to the persistent and unavoidable risk of chokepoints and assesses the vulnerability level of several major oil and gas importers across Asia and Europe, including India. Setting a five-track policy toolkit to reduce risks the analysis identifies reducing reliance on oil and LNG –through electrification, efficiency, grids, storage and domestic clean energy—as the most durable way to reduce exposure to chokepoints..
“What we’re seeing in Hormuz isn’t a one-off event but an inherent feature of the global oil and gas system,” said Richard Smith, Senior Policy Advisor at E3G. “Renewables and energy efficiency offer the most viable path to breaking this cycle.”
Beyond physical blockages, the report highlights “paper chokepoints”—market disruptions caused by shipping constraints, insurance withdrawals, rerouting delays, and rising risk premiums. These factors can tighten supply even without a complete shutdown of transit routes.
Because oil and LNG markets are globally interconnected, disruptions in one region can trigger rapid knock-on effects elsewhere. This often leads to price spikes and intensified competition for cargoes. Countries with high exposure to chokepoints and limited short-term demand flexibility face heightened macroeconomic risks, even when global supply appears abundant.
E3G’s five-track toolkit proposes a mix of immediate, medium-, and long-term policy responses to strengthen resilience to reduce short-term risks and structurally lower long-term dependence on vulnerable supply chains. “Asia receives nearly 90% of the oil and LNG transiting the Strait of Hormuz, and the consequences of prolonged disruption will be felt unevenly across the region. For India, sustained high oil prices translate directly into widening current account deficits, currency pressure, and fiscal stress that could constrain both growth and public spending. Japan and South Korea, among the world’s most LNG-dependent economies, face acute supply vulnerability with limited ability to absorb prolonged market tightness,” says Madhura Joshi, Programme Lead.