The closure of the Strait of Hormuz amid the US-Israel war with Iran has disrupted 18.4 million barrels per day of oil and 110 bcm of LNG
This has driven Brent above $100 and Asian LNG above $25 per MMBtu.
The Energy Transitions Commission warned that this unprecedented shock exposes structural vulnerabilities.
It argued that accelerating clean energy is vital to cut dependence on fragile fossil fuel routes.
The closure of the Strait of Hormuz, a strategic maritime gateway for global energy supplies, following the United States and Israeli war with Iran has disrupted around 18.4 million barrels per day of oil flows, equivalent to roughly a fifth of global oil supply, according to a new analysis released on May 15, 2026. This has affeced 110 billion cubic metres per year of liquefied natural gas (LNG) trade and about 30 per cent of globally traded fertiliser inputs.
Brent crude prices have risen above $100 per barrel for the first sustained period since 2022, while Asian LNG benchmark prices have more than doubled to above $25 per MMBtu.
The report, Lessons on Energy Security after the Hormuz Crisis: How Accelerating the Clean Energy Transition Builds Resilience Against Future Price Shocks, by the Energy Transitions Commission, said the crisis has exposed a “structural vulnerability” in the global energy system, arising from dependence on geographically concentrated fossil fuel supplies and critical transit routes.
The disruption has already reduced net oil supply by around 11 million barrels per day after emergency offsets, while the International Energy Agency estimated a realised global oil supply fall of about eight million barrels per day in March alone. That is nearly double the peak supply loss during the 1973 Arab oil embargo or the 1990 Gulf War, the report stated.
“The current energy crisis is the biggest ever,” said Fatih Birol, executive-director of the International Energy Agency, in the report, owing to the scale of supply disruption moving through Hormuz.
The crisis is reverberating across Asia, Europe and developing economies heavily reliant on imported fuel. The report noted that around 84 per cent of crude oil and more than 80 per cent of LNG passing through Hormuz is destined for Asian markets, making the region especially vulnerable.
Countries including Sri Lanka, Pakistan, Bangladesh, India and the Philippines are already experiencing fuel shortages, while governments have imposed emergency measures, ranging from fuel caps and shorter work weeks to remote working and electricity conservation.
In India, the report said, strategic oil reserves cover only around 10 days of demand, limiting the country’s ability to absorb prolonged disruptions. It also noted that LPG shortages are pushing consumers towards electric cooking, with induction cooktop sales reportedly rising between threefold and thirtyfold across online platforms.
Europe is also facing mounting pressure from higher gas prices. The report cited Ursula von der Leyen as warning in April that the Iran conflict and Hormuz disruption were costing the European Union almost €500 million per day.
According to the report, Asian LNG prices rose from around $10 to $12 per MMBtu before the crisis to more than $25 per MMBtu afterwards. Coal prices have also surged, with Wood Mackenzie estimating Newcastle coal prices climbed from $114 per tonne in February to around $132 per tonne in recent trades.
The report highlighted long-term risks from damage to LNG infrastructure. Sultan Al Jaber said on April 9, 2026 that Hormuz transit is now subject to “permission, conditions and political leverage”. QatarEnergy also stated in March that missile attacks had reduced LNG export capacity by about 17 per cent, with repairs expected to take three to five years.
The commission argued that accelerating renewable energy, electric vehicles, heat pumps and battery storage would provide a more resilient alternative to fossil fuel dependence. It projected that by 2035, clean energy measures could displace more than 20 per cent of global oil and gas demand, equivalent to all exports currently moving through Hormuz.
The report estimated the world currently spends around $4 trillion annually on fossil fuels. If current elevated prices persist, additional fossil fuel expenditure this year alone could amount to $1 trillion to $2 trillion globally, roughly equivalent to 1 to 1.5 per cent of global GDP.
By contrast, the commission estimated that achieving a global Net Zero energy system would require around $3.5 trillion per year in investment until 2050, compared with current clean energy investment levels of about $2 trillion annually.
The report argued that renewable energy systems are inherently more resilient because they rely on long lived infrastructure such as solar panels, batteries and grids rather than continuously traded fuel commodities vulnerable to geopolitical shocks.
“Countries can respond not only by managing disrupted fossil supply, but by accelerating technologies that structurally reduce exposure to oil and gas markets,” the report said.