The assumption that the Strait of Hormuz would remain a neutral commercial corridor has
broken. This report examines the structural consequences for energy flows, insurance markets, and
the organisations whose supply chains run through the Gulf — and constructs four scenarios for
how the disruption resolves.
The Strait of Hormuz was always a point of concentration. The Gulf export system — its
processing plants, liquefaction trains, loading terminals, and storage facilities — was built on the
assumption that maritime access through the Strait would remain commercially neutral. The
question is no longer whether that assumption has been tested. It is whether commercial actors
— shippers, insurers, charterers, financiers — will continue to treat passage as reliable when
access requires political classification and coordination with a state authority.
This report examines the physical geography of Gulf exports, the limits of the available
alternative routes, and the specific exposure of different commodity flows and import-dependent
economies. It then sets out four scenarios for how the situation develops over the next 24
months, from a negotiated return to commercially neutral passage to a permanent regime in
which transit is conditional.
WHAT THIS REPORT COVERS
The structure of Gulf export infrastructure and why the Strait cannot be bypassed at scale:
the Yanbu and Habshan-Fujairah pipelines handle selected crude volumes but do not
replace the full export system, and Gulf LNG has no viable alternative route.
The distinct exposure of Asian import-dependent economies — China, India, Japan, South
Korea — for which a sustained disruption to LNG flows creates supply risk beyond price
exposure.
The insurance, chartering, and financing conditions that determine whether the Strait
functions as a commercial route in practice, regardless of formal passage rights.
Four scenarios for how the situation develops, with different implications for energy
pricing, long-term supply contracts, infrastructure investment, and the distribution of
supply risk.
Indicators to watch across the Iranian political system, regional diplomatic channels, and
shipping and insurance markets as each scenario develops.
