The effects could ultimately reach the daily lives of ordinary Norwegians.
Gabriel Fuentes
The impact of the closure of the strait of Hormuz
As tensions escalate around the Strait of Hormuz, Europe and Norway face the risk of disruptions to critical energy and shipping routes.
As tensions rise around the Strait of Hormuz, Europe and Norway face the risk of disruptions to the energy and shipping routes that sustain their economies. The effects could ultimately reach the daily lives of ordinary Norwegians.
The Strait of Hormuz, a narrow maritime passage between Iran and Oman, is one of the most critical chokepoints in the global energy system. Roughly one fifth of global oil consumption and nearly one third of seaborne crude trade transits though this chokepoint, making it the single most important artery for the export of Gulf hydrocarbons. As the only maritime gateway connecting the Persian Gulf to the Indian Ocean, any disruption in Hormuz immediately constrains global energy supply and trigger sharp volatility in international oil markets.
As of March 8th, satellite tracking data from AXS Marine indicated that 172 large crude oil tankers were positioned inside the Persian Gulf. The fleet represents a combined cargo capacity of approximately 315 million barrels of crude oil.
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If navigation through the Strait of Hormuz continues to be disrupted amid the escalating conflict between Iran, the United States, and Israel, these vessels would effectively be unable to exit the Gulf, temporarily removing a substantial volume of oil transport capacity from global markets.
Combined with reported security incidents targeting energy infrastructure in the region, these developments have contributed to upward pressure on oil prices, which have surpassed the 100 USD per barrel.
The disruption of energy flows in the Gulf would also influence across the broader maritime trade network linking Asia and Europe. The Suez Canal and the Bab-el-Mandeb strait already represent critical transit points for global shipping.
he Suez Canal and the Bab-el-Mandeb strait already represent critical transit points for global shipping.
Gabriel Fuentes
Heightened tensions in the Gulf increase the strategic importance of routes crossing these chokepoints. However, ongoing security risks in the Red Sea, including attacks attributed to Houthi forces in Yemen, have already forced many shipping companies to reroute vessels around the Cape of Good Hope, adding significant distance, fuel costs, and transit time to global supply chains. As of today, the Houthis, despite messages of support to Iran, have not taken any military action on retaliation.
The implications extend beyond energy markets. Norwegian seafood exports to Asian markets, which depend heavily on the Suez Canal for timely delivery, could face longer transit times and higher freight costs. At the same time, Norwegian tanker operators may initially benefit from higher freight rates and increased demand for available tonnage. However, if sustained oil price increases reduce global demand, the longer-term effect could be declining cargo volumes and increased volatility in tanker markets.
Oil price shocs also carry macroeconomic consequences.
Gabriel Fuentes
Oil price shocks also carry macroeconomic consequences. Historical estimates from the International Monetary Fund suggest that a 10-dollar increase in oil prices can add roughly 0.2–0.4 percentage points to inflation. Even moderate increases therefore risk pushing up fuel costs, transportation prices, and household energy bills across Europe. Higher inflation could complicate the plans on adjusting interest rates after the inflationary surge that followed the COVID-19 pandemic.
In such a scenario, geopolitical dynamics may also shift. Persistent supply disruptions could increase the attractiveness of Russian oil exports, despite existing sanctions. While direct imports remain restricted in Europe, higher global prices and tighter supply could increase indirect flows through intermediary markets, providing Russia with economic and strategic leverage.
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NHH researcher and shipping expert Gabriel M. Fuentes is a former officer in the merchant navy with experience in navigating through the Gulf of Aden and the Suez Canal. He closely monitors the crisis in the Red Sea.
For Norway’s maritime sector, the situation is quite mixed. Tanker companies may experience short-term gains from higher freight rates and increased demand for available tonnage. However, prolonged instability would likely drive-up insurance premiums, fuel costs, and overall operational risk. Despite assurances from President Donald Trump that the United States could escort vessels transiting the Strait of Hormuz, significant uncertainty remains.
In particular, marine insurers have begun withdrawing or restricting coverage for sailings in the region, a development that may prove to be the most immediate barrier to transport oil from the Gulf.