A prolonged shutdown of the Strait of Hormuz would have far-reaching consequences for the global economy, severely disrupting a wide range of markets. As a strategic waterway through which a significant share of the world’s oil and gas supplies passes, its continued blockage could affect maritime transportation, industry, energy, agriculture, and financial markets.

In transportation and industry, the first major consequence would be a sharp rise in shipping insurance costs, with premiums for vessels transiting the region increasing by as much as 25-fold. This would significantly raise transportation and logistics costs, making the movement of goods across global markets more difficult and expensive. At the same time, disruptions in the supply of raw materials could drive prices of key industrial metals such as aluminum and steel up by 30%, putting pressure on major industries including automotive manufacturing, construction, and industrial equipment production.

The impact on the energy sector would be even more profound. Global jet fuel prices could rise by as much as 160%, creating serious challenges for the aviation industry. Natural gas prices in Europe could increase by 50%, placing additional pressure on energy-importing countries. In Egypt, gas import costs could climb by as much as 90%, while gasoline prices in the US could rise by 26%, contributing to higher inflation and increased living costs.

Agriculture and food security would also be affected. Continued disruption in this maritime corridor could push urea prices up by 50% and reduce global access to chemical fertilizers by 30%. Such developments could lower agricultural output and increase production costs. Meat and grain prices in Europe could rise by around 15%, while the risk of food shortages and even famine in some parts of the world would increase.

The consequences would extend beyond these sectors and into global markets more broadly. Estimates suggest that airline ticket prices could double, making air travel significantly more expensive. The US housing market could face a slowdown, while European retailers could experience reduced food variety on store shelves. International trade would also suffer major disruptions, with the movement of goods becoming slower and more costly.

A prolonged crisis could push the global economy into a period of stagflation, a situation in which economic growth weakens while inflation continues to rise. In such an environment, investors would act more cautiously and uncertainty across global financial markets would increase, negatively affecting stock markets, international investment flows, and economic growth prospects.

For this reason, the Strait of Hormuz remains one of the world’s most sensitive economic chokepoints. Its continued closure would challenge not only energy markets, but also trade, industry, agriculture, and the livelihoods of millions of people worldwide, with potentially significant long-term consequences.