Hormuz Blockade Could Deepen World’s Worst Energy Crisis and Risk a Dangerous Misstep

• President Donald Trump ordered a naval blockade of the Strait of Hormuz on Sunday, April 12, 2026, dimming hopes for a quick end to the conflict and escalating a standoff with Iran that has already triggered the worst energy shock in history. The blockade, which targets vessels of all nations entering or departing Iranian ports and coastal areas, took effect on Monday, April 13, 2026.
• Tanker traffic through the strait ground to a halt within hours of the announcement, reversing a gradual recovery seen after a two-week ceasefire, with at least two vessels turning back. Crude oil surged as investors scrambled to price in tighter supply, with US WTI futures rising more than 8% and Brent crude over 7% to $101.86.
• Before the conflict, roughly one-fifth of the world’s oil passed through the Strait of Hormuz. However, the flow has since slowed to a trickle, upending supply chains for oil, fertilisers, apparel and industrial goods. Analysts have warned that clearing the backlog could take weeks even after a resolution.
• A full blockade would further tighten the squeeze on global supply, with analysts warning oil prices could rise to around $150 per barrel. Commodity prices for fertiliser and helium, critical inputs for food production and semiconductor manufacturing, are likely to keep climbing, fanning inflation that is already accelerating.
• The blockade risks drawing major economies into the conflict, particularly China and India, as a blanket ban on tankers carrying Iranian crude threatens to cut off supply flows. Further, it could potentially reignite geopolitical tensions and expose countries with safe-passage arrangements to the crossfire.
• While some analysts view the blockade as a negotiating tactic within ongoing U.S.-Iran talks, others warn it carries significant downside risks, including military escalation, legal challenges under international law, and prolonged supply disruptions, with the potential to trigger an energy shock comparable to or worse than the 1970s oil crisis.

(Source: CNBC)