Energy security alarm over Gulf blockade
The month-long closure of the Strait of Hormuz, a key artery for global energy shipments, has intensified concerns that the world could face economic disruption exceeding that of the 1970s oil shocks. The narrow waterway typically carries about 20% of global oil supplies, along with significant volumes of gas and refined products.
Lars Jensen, chief executive of Vespucci Maritime and a former Maersk director, warned that the fallout from the U.S.-Israeli war with Iran could be “substantially larger” than the turmoil seen half a century ago. His remarks echo earlier comments from International Energy Agency head Fatih Birol, who described the situation as the greatest energy security threat in modern history.
How the 1970s oil shocks unfolded
The oil crises of the 1970s were triggered by deliberate policy actions. In October 1973, Arab producers imposed an embargo on nations supporting Israel during the Yom Kippur War and simultaneously cut output. Oil prices nearly quadrupled within months, triggering fuel rationing and deep recessions in major economies.
Inflation surged, unemployment climbed and social unrest spread. Both the United States and the United Kingdom entered prolonged recessions between 1973 and 1975. A second shock followed in 1979 during the Iranian Revolution, further destabilizing energy markets.
Current supply strain and delayed impact
Since hostilities began a month ago, tanker traffic through Hormuz has effectively halted. Jensen noted that shipments dispatched before the closure are still reaching refineries, but those flows will soon taper off. Even if the strait reopened immediately, shortages and elevated energy costs could persist for six to twelve months due to supply chain lags.
President Donald Trump has sought to restore shipping by urging allied naval escorts and issuing warnings to Iran. Yet uncertainty remains over how quickly safe passage could be reestablished.
Is today’s market more resilient?
Some analysts argue that today’s global energy system is structurally stronger than in the 1970s. Economist Dr. Carol Nakhle of Crystol Energy points out that the modern market is more diversified and less oil-intensive, with strategic reserves and emergency response tools in place.
However, others stress the sheer scale of the disruption. Alicia Garcia Herrero of Natixis CIB noted that the 1970s shocks reduced global supply by roughly 5–7%, whereas the current blockade affects around 20% of supply. If prolonged, she warned, the impact could surpass previous crises, with sharper price spikes and heightened recession risks, particularly in import-dependent regions.
While improved reserves and efficiency may cushion the blow, the magnitude of the supply loss underscores the vulnerability of global energy flows to geopolitical conflict.