By Szilvia Sandberg, edited by Adrian Sandberg
To understand the gravity of the blockade of the Strait of Hormuz, we have to know more about the geopolitical location of the strait and its impact on the world economy. The 104 miles (c.167 kilometers) long strait is the only sea passage from the Persian Gulf to the open ocean which also explains its strategic importance. According to statistics, during 2023–2025, 20 per cent of the world's liquefied natural gas (LNG) and 25 per cent of seaborne oil trade passed through the strait annually. No wonder that economic experts started comparing the situation to the 1970s energy crisis. The US may be energy independent, but hydrocarbons are a fungible (globally-traded) commodity; this week, the average US gas price has hit 4 USD a gallon and the oil prices are rising steadily. But there are several aspects of the crisis which we don’t think about. But we should.
The Extraordinary Session of the Council of the International Maritime Organization (the IMO, the UN Shipping Agency) convened on 18 to 19 March and condemned the threats and attacks against vessels and purported closure of the Strait of Hormuz, in line with UN Security Council Resolution 2817. As of early April 2026, reports estimate somewhere between hundreds up to more than 2,000 ships, including approximately 85 oil tankers, are still stranded or are facing severe delays in and around the Strait of Hormuz. The heightened conflict and blockade led to a massive 95 per cent drop in normal traffic. Up to 20,000 seafarers are affected, with many vessels awaiting clearance from Iran. The IMO called for the establishment of a safe maritime framework, as a provisional and urgent measure, to facilitate the safe evacuation of merchant ships stranding at the strait.
Beyond the human aspect, there is an even higher risk arising from the situation. The presence of over 85 trapped oil tankers, carrying roughly 5.5 billion gallons of oil, creates a "ticking time bomb" in the Persian Gulf. Damage to vessels could result in a massive oil spill. Such an ecological disaster would cause irreversible damage to the Qeshm Island and Adjacent Areas, an Ecologically or Biologically Significant Marine Area (EBSA) under the Convention on Biological Diversity. The region is also home to the Daymaniyat Islands and the Musandam Islands, which are Key Biodiversity Areas designated by the International Union for Conservation of Nature (IUCN). Beyond the mangrove forests, several endangered and threatened species are also found in the Strait of Hormuz such as whale sharks, Indian Ocean humpback dolphins or green sea turtles.
Greenpeace Germany has also analysed the blocked Strait of Hormuz using ship movement data and satellite imagery and simulated the potential consequences of oil spills in the Persian Gulf if tankers are damaged. By comparison, when Iraqi troops set fire to oil wells as they withdrew from Kuwait in January 1991, an estimated 380-520 million gallons of oil was released into the gulf. The oil spill reached a jaw-dropping 101 miles by 42 miles in size. When BP’s Deepwater Horizon exploded in the Gulf of Mexico in April 2010, the spill leaked approximately 206 million gallons of oil. We might also remember Ixtoc 1, an exploratory well which exploded in the Bay of Campeche in 1979 spilling approximately 140 million gallons of oil into the Gulf of Mexico. In that case, more than 45 years were not enough for the region to fully recover from the damage caused by the spill. Considering the above mentioned disasters, we can easily imagine what the spillage of even a fraction of those 5.5 billion gallons of oil might mean.
As if that weren't enough, there is an insurance crisis rapidly evolving, too. The "de facto" closure (not a legal, formal closure) complicates insurance coverage and legal compliance under UNCLOS (United Nations Convention on the Law of the Sea). Underwriters have started issuing notices of cancellation, triggering automatic war risk exclusion clauses. Additional War Risk Premiums (AWRP) have skyrocketed from typical rates (0.05-0.15 per cent of hull value) to over 1-10 per cent (!) of hull value per transit, making voyages financially nonviable. Reinsurers are exiting the market because a so-called VLCC incident (Very Large Crude Carrier Incident) could cost over 150 million USD for the hull, c.100 million USD for cargo, and immense liabilities for environmental cleanup in an area lacking significant cleanup infrastructure.
In summary, an energy crisis cannot be underestimated. Its far-reaching impact, comparable to the 1979 oil shock or the recent economic meltdown caused by COVID 19, is the focus of most media attention. It might take years for the global economy to recover; but how much time will it take for the ecological life of the Gulf to recover after a potential catastrophe?
Image: Musandam (Pixabay.com)