When the Strait of Hormuz becomes a “dead knot”: Who is paying the price for the energy corridor showdown?

If you open the oil price K-line chart before and after the clashes on May 7, you will find a telling phenomenon: after WTI crude oil plunged sharply during trading, it rebounded rapidly, rising by 4% at one point and coming close to $99 per barrel; Brent crude returned above $100 per barrel. This intense V-shaped reversal aptly reflects the market’s extreme back-and-forth between “hopes for peace talks” and “the reality of conflict.”

But what is truly worth focusing on is not how many points oil prices have risen, but what kind of structural shock the long-term blockade of the Strait of Hormuz is bringing to the global economy. According to a warning from the Director of the International Energy Agency, due to this conflict, the world is losing 14 million barrels of oil every day. Since the outbreak of the conflict on February 28, the strait has been almost closed all the time; this sea choke point, carrying about one-fifth of the world’s energy supply, has been tightly shut. The IMF has issued an even stern warning: if the conflict lasts for several months, the global economic growth rate in 2026 could shrink to 2%.

This figure is even more severe than most people realize. What does 2% of global growth mean? It means many economies will slide toward the edge of recession; it means inflationary pressures will transmit from the energy sector to food, transportation, and manufacturing across the board; and it means debt risks in emerging markets and developing economies will rise sharply. This is no longer just a question of whether oil prices are high or low—it is that the stability of the global macroeconomy itself is being threatened.

More complicated is that the Strait of Hormuz is currently in a “dual blockade” state: Iran obstructs non-Iranian ships from transiting, trying to establish some form of “institutionalized control,” and even sets up government agencies to review and collect transit fees; meanwhile, the United States imposes maritime blockades on Iranian ports, prohibiting ships from docking at or leaving Iranian ports. Both sides use blockade measures as tools of pressure, and as a result, commercial shipping is nearly completely paralyzed. For Asian economies that rely on imported oil, for European countries experiencing soaring energy prices, and for ordinary consumers who queue at gas stations—every day the strait is closed, the cost is accumulating.

Deutsche Bank’s analytical framework lays out three possible directions for oil prices, which investors may want to consider: under the baseline scenario, if the strait gradually restores passage, oil prices could fall back to around $85; whereas if the blockade lasts until 2027, oil prices could surge to $150 and remain at high levels for a long time, triggering global risks of stagflation. At present, while the third scenario is still the least likely, with each round of failed negotiations and each escalation of military friction, the tail of this “black swan” is getting heavier.

It is also worth noting that Iran has recently shown signs of accelerating efforts to resolve this issue diplomatically. During the prior visit of Alaraji to China, Iran explicitly separated the issue of opening the Strait of Hormuz from the nuclear agenda, hoping to prioritize restoring normal shipping and leave the nuclear talks as part of subsequent negotiations. If this step-by-step strategy can gain U.S. approval, it could become a key to breaking the current deadlock of the blockade.
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