The effective closure of the Strait of Hormuz has caused a major shake-up in the world's trade and energy markets.
In a geopolitical crisis that erupted after the joint attack on Iran by the United States and Israel in late February 2026, Iran declared the narrow passage closed and warned that it would attack any ship that tried to pass through it.
This vital route connecting the Persian Gulf to the Indian Ocean accounts for almost 20 percent of the global oil and liquefied natural gas (LNG) that moves by sea every day, a statistic that explains why the closure of this route has an immediate impact on the world's energy and trade markets.
For the past few days, almost no ships have dared to enter these waters.
Shipping giants such as Maersk and Hapag-Lloyd have stopped transiting through the strait, and tanker and container traffic has drastically declined as maritime insurance rejected the risk of war and shipping was declared dangerous.
Many ships are now taking the long route through southern Africa, via the Cape of Good Hope, which significantly increases transit times and operating costs.
The direct impact on energy markets is clear, with Brent crude oil prices up more than 10 percent as the market reflects the sudden supply squeeze, and analysts predict prices could surge above $100 a barrel if the restrictions continue for much longer.
Natural gas prices have also jumped more than 30 percent in several major markets.
The Iranian government’s statement that any ship attempting to pass through will be attacked has added to market uncertainty and has led some countries to consider military support to ensure the key maritime route remains secure.
Strait of Malacca as Global Alternative Route
This situation is not just an energy issue, it is also seeping into the global supply chain. With the Hormuz route reduced, major destinations for oil and goods from the Middle East are now forced to rely on alternative routes, including the Strait of Malacca.
The strait, which connects the Indian Ocean and the South China Sea between Malaysia, Indonesia and Singapore, is already one of the world’s busiest chokepoints.
The combination of these strategic locations now sees ship traffic including oil, containerized goods and raw materials converging towards the Strait of Malacca, increasing the risk of congestion and logistical pressures.
For Asian countries, including China, India, Japan and South Korea, the reliance on this route is becoming increasingly apparent as they seek alternative imports from Africa, Latin America and South Asia.
This reliance not only adds to the cost of transportation but also creates higher security and political risks due to the need to ensure smooth movement through long routes that are more vulnerable to piracy, political tensions and rising insurance costs.
Malaysia and Asean Also Affected by Trade Conflicts
While the Strait of Malacca remains the heart of global trade, the additional traffic pressure is set to impact shipping costs, transit times and the prices of household goods as logistics costs rise.
In addition, continued disruptions in the Strait of Hormuz are driving global energy inflation which will be felt through fuel and domestic transportation costs, a reality that consumers and policymakers must face.
