What happened?
On 28 February 2026, the military escalation led to a disruption in shipping through the Strait of Hormuz, with commercial traffic in the waterway becoming disrupted. The Strait of Hormuz is a narrow maritime passage between Iran and Oman's Musandam Peninsula, connecting the Persian Gulf with the Gulf of Oman and, beyond it, the Arabian Sea. This strait is particularly important because it carries large volumes of crude oil and energy products. Due to the incident that began on 28 February 2026, shipping through the Strait sharply fell, disturbing supply chains and global trade. Ship movements through the Strait had fallen by around 95 percent, while Brent crude prices rose above $90 per barrel (UNCTAD, 2026a).
Why does it matter?
The Strait of Hormuz is an important global trade route because of its geography. It has a narrow passage through which large volumes of energy and other goods are carried. In the first half of 2025, around 20.9 million barrels of crude oil, condensate and petroleum products per day passed through the Strait, equal to about one-quarter of global maritime oil trade (EIA, 2026). The Strait is important not just because of oil. Around one-fifth of global seaborne LNG trade and one-third of global seaborne fertilizer trade, about 16 million tonnes, passed through the Strait in the period before the military escalation (UNCTAD, 2026a). Iran, Iraq, Kuwait, Qatar and Bahrain heavily depend on the Strait to reach international markets, while Saudi Arabia and the UAE have alternative pipelines (EIA, 2026). Hence, this disruption does not only affect the Gulf countries but also major Asian energy importers. Around 89 percent of crude oil and condensate passing through the Strait was for Asian markets in the first half of 2025, particularly China, India, Japan and South Korea (EIA, 2026). Around 83 percent of LNG passing through the Strait was destined for Asian markets in 2024 (EIA, 2025).
Background
A strait is a naturally occurring narrow waterway that connects two larger bodies of water (Britannica, 2026a). The Strait of Hormuz is the only sea channel linking the Persian Gulf with the Gulf of Oman and the Arabian Sea, separating Iran from Oman and the Arabian Peninsula (Britannica, 2026b). The Strait is approximately 21 nautical miles (39 km) wide at its narrowest point (IEA, 2026). During the military escalation, threats and attacks on ships passing through the Strait led to an approximately 95 percent drop in vessel traffic, causing a major disruption to global energy and commodity supplies and contributing to higher prices (UNCTAD, 2026b).
What are the implications?
Due to this disruption, energy costs have soared, particularly in countries dependent on imported oil and gas. Brent crude rose above $100 per barrel, while Bangladesh raised petrol and diesel prices by up to 17.4 percent in September, as higher global oil prices increased its import costs. Pakistan also introduced fuel subsidies to reduce the impact of rising petrol and diesel prices on consumers (Reuters, 2026a, 2026b). India was also affected, with around 90 percent of its LPG imports normally coming through the Strait; its LPG imports fell sharply after the disruption (Indian Express, 2026). The disruption has also affected fertilizer markets. Natural gas is a major input in producing ammonia and nitrogen-based fertilizers, while around one-third of global seaborne fertilizer trade passes through the Strait. The World Bank reported that fertilizer prices increased by more than 12 percent in the first quarter of 2026, raising concerns about agricultural costs and food prices. Developing economies with high debt burdens and limited financial resources may find it harder to absorb these higher import costs (UNCTAD, 2026a; World Bank, 2026).
What happens next?
Whether the Strait can be reopened and shipping can return to normal will depend on an agreement between the two sides. On 25 September 2026, Iran proposed a seven-day plan to reopen the Strait, with conditions including the lifting of the U.S. blockade and sanctions (Al Jazeera, 2026). Even if shipping resumes, food prices and supply chains may take time to return to normal, as they generally adjust more slowly than energy markets (UNCTAD, 2026c).
References
Al Jazeera. (2026, September 25). What’s in Iran’s seven-day plan to reopen the Strait of Hormuz?
Britannica. (2026a). List of important straits.
https://www.britannica.com/topic/List-of-Important-Straits
Britannica. (2026b). Strait of Hormuz.
https://www.britannica.com/place/Strait-of-Hormuz
Indian Express. (2026, May 6). How much did LPG imports fall due to Hormuz closure, and why demand may fall too?
https://indianexpress.com/article/explained/explained-economics/india-lpg-supply-
crisis-hormuz-imports-impact-10674549/
International Energy Agency. (2026, February). Strait of Hormuz.
https://www.iea.org/about/oil-security-and-emergency-ission/strait-of-hormuz
Reuters. (2026a, September 17). Energy disruption hits Bangladesh and Pakistan as Gulf crisis worsens.
Reuters. (2026b, September 21). Bangladesh raises fuel prices as Middle East conflict drivesup costs.
https://www.reuters.com/business/energy/bangladesh-raises-fuel-prices-by-up-17-amid-global-oil-price-surge-2026-09-21/
U.S. Energy Information Administration. (2025, June 24). About one-fifth of global liquefied natural gas trade flows through the Strait of Hormuz.
https://www.eia.gov/todayinenergy/detail.php?id=65584
U.S. Energy Information Administration. (2026, March 3). World oil transit chokepoints.
https://www.eia.gov/international/content/analysis/special_topics/World_Oil_Transit_Chokepoints/
UN Trade and Development. (2026a, March 10). Hormuz shipping disruptions raise risks for energy, fertilizers and vulnerable economies.
UN Trade and Development. (2026b, April 1). Hormuz disruption deepens global economic strain across trade, prices and finance.
UN Trade and Development. (2026c, June 30). Hormuz reopening may calm markets, but vulnerable economies face lasting consequences.
World Bank. (2026, April). Commodity markets outlook: April 2026.
https://thedocs.worldbank.org/en/doc/f3138644a1e8e2bb631399ae11d6c408-0050012026/original/CMO-April-2026.pdf