Strait of Hormuz Shutdown Shakes Asian Energy Markets

Tanker traffic through the Strait of Hormuz has effectively halted after US-Israeli strikes on Iran triggered retaliatory attacks, creating an unprecedented energy supply crisis that has hit Asian economies hardest. Japan and South Korea face the greatest risk because most of their fossil fuel imports transit the chokepoint.

The cost to hire a supertanker from the Middle East to China climbed to over $423,000 per day, roughly double Friday’s level, LSEG data show. Iran’s Revolutionary Guard Corps declared the Strait closed and warned it would fire on any vessel attempting passage after the killing of Iran’s Supreme Leader Ayatollah Khamenei in joint US-Israeli strikes; at least four vessels have been hit and many shipping firms and insurers have withdrawn from the corridor.

Kpler reports that commercial operators pulled out after insurers withdrew war-risk coverage, leaving only a small number of Iranian and Chinese-flagged vessels transiting outside Western insurance and classification systems.

Japan, South Korea, Asia

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