The outbreak of the U.S.-Israeli war on Iran and the closure of the Strait of Hormuz catalyzed an energy market shock that reverberated globally, creating “the largest supply disruption in the history of the global oil market,” according to the International Energy Agency.
The closure emphasized the strait’s function as one of the world’s most vital energy chokepoints, through which roughly 20% of global oil and liquid natural gas (LNG) passes. Iran’s retaliatory attacks and blockade, meanwhile, highlighted Tehran’s ability to disrupt supply chains, inflate currencies, and render the Hormuz as a commercially unusable trade corridor. The result of this crisis may well be a major rerouting of Eurasian trade.
Europe, which has hit hard by the strait’s closure, is particularly keen to support new corridors for commerce. At the recent G7 Summit, European Commission President Ursula von der Leyen argued that Europe must now forge alternative trade and energy routes to bypass Hormuz.
Two alternative trade corridors have been especially propelled.
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