Key Points

• A Strait of Hormuz disruption is the dominant driver, cutting into both oil and LNG flows and creating broad price risk.
• LNG looks especially constrained because rerouting options are limited, strategic stockpiles are thin, and major export capacity is already running near full output.
• Oil markets still have some temporary buffers from reserves, sanctioned flows, and cargoes in transit, but those cushions are narrowing.
• Import-dependent markets in Europe and Asia face higher power and industrial fuel costs, with some regions already seeing shortages or tighter rationing pressure.
• The shock is also affecting climate and energy policy choices, with some governments leaning more toward coal, fossil subsidies, or delayed phaseouts.
• The event is exposing a structural vulnerability: energy systems remain sensitive to concentrated maritime chokepoints and limited fast-response supply options.