What happens when one narrow waterway helps set the price you pay at the pump?
Since Iran effectively shut the Strait of Hormuz after U.S. and Israeli strikes on February 28, about one-fifth of the world’s oil and liquefied natural gas supply has been disrupted, pushing crude prices above $100 a barrel and triggering the biggest emergency oil stock release in the International Energy Agency’s history.
The immediate scramble is about barrels and tankers. But this third energy shock of the 2020s is also turning “energy security” into a race to electrify faster, expand domestic low-carbon power, and reduce exposure to chokepoints that can be closed overnight.
Geoffrey Pyatt, a former U.S. energy official now at McLarty Associates, summed it up bluntly when he said, “The issue of energy security has never been as acute as now.”
Hormuz is the new stress test
The IEA says shipping through Hormuz, which normally carries around 20% of global oil consumption, has been reduced to a trickle, and its latest Oil Market Report puts pre-war crude and product flows at around 20 million barrels per day. When that artery constricts, the ripple runs through everything from jet fuel to diesel for trucks.
The vulnerability is not just about geography, it is also about security. Reuters has documented strikes on major oil and gas sites across the region, a reminder that energy assets can become military targets fast.
Governments are tapping stockpiles, but they are also leaning on demand cuts that show up in daily routines. The IEA’s quick options include more remote work, lower highway speeds, and shifting trips from private cars to buses and trains, moves that can soften the hit to households and businesses even if they cannot replace lost supply.
Nuclear is back in the conversation
Europe is moving, cautiously but clearly, toward a nuclear reboot after years of plant closures. European Commission President Ursula von der Leyen announced a €200 million (about $218 million) guarantee designed to de-risk private investment in innovative nuclear technologies, and she called the drop in Europe’s nuclear share to 15% from about a third in 1990 “a strategic mistake.”
In Asia, the politics are even sharper because the region relies so heavily on Middle East oil and LNG. Taiwan’s economy minister said the island is considering restarting its last nuclear station, while Japan faces renewed calls to speed up reactor restarts that have been debated since Fukushima, with officials still stressing safety as the red line.
China shows what electrification buys you
China has not escaped the shock, but it is absorbing it differently. Reuters reported that EVs make up more than half of China’s domestic new car sales and that renewables provide more than half of its electricity, which helps blunt how quickly oil spikes translate into economic pain.
Beijing has still taken emergency steps, including a reported 10% production cut by Sinopec and a ban on fuel exports to avoid shortages at home.
The contrast with the United States is telling, since Reuters put U.S. EV sales below 10% of the market and renewables at around a quarter of electricity generation, leaving more commuting and freight tied to oil.
Clean-tech supply chains are the next chokepoint
This is where the energy transition gets tricky. An EU lawmaker warned that rebuilding energy systems could create “total dependencies” on Chinese hardware and software inside power grids and clean energy infrastructure, swapping one strategic vulnerability for another.
Europe is already weighing a mix of tools, including carbon market changes meant to curb price pressure alongside subsidies and tax breaks, while still pushing renewables and efficiency harder.
The European Commission has also argued that cutting oil consumption can ease stress on markets, especially for households and high-fuel sectors like aviation.
The business fallout goes beyond the barrel
For companies, the pain is not limited to gasoline and shipping costs. Reuters estimated the EU’s fossil fuel import bill has risen by about €6 billion (roughly $6.5 billion) since the war began, and the IEA described extreme volatility that drove Brent close to $120 a barrel earlier this month.
There is also a quieter supply chain risk that hits the grocery bill. Reuters reported that fertilizer trade through Hormuz has been disrupted and that nitrogen-based fertilizer prices have jumped roughly 30% to 40%, raising concerns about food production as planting decisions get made.
What to watch next
The biggest near-term question is whether transit through Hormuz can be restored, because the IEA says that is essential for stabilizing markets. Even if shipping resumes, the IEA is already tracking shutdowns of refining and export capacity across the region, and some damage from strikes may take years to repair.
The second question is political, and it cuts both ways. The Trump administration has argued the crisis is a reason to produce more oil and gas and has eased sanctions on Russia to boost supply, while other governments are using the same shock to justify faster renewables, EV adoption, and a return to nuclear power.
The official statement was published on the International Energy Agency.
