For decades, energy analysts and war planners have modeled the scenario that is now unfolding in real time: the closure of the Strait of Hormuz, the 21-mile-wide chokepoint between Iran and the Arabian Peninsula through which roughly 20 percent of the world's petroleum and a significant share of its liquefied natural gas flows every day.

The models were broadly correct. The reality is proving worse.

The Numbers

Oil prices surged from under $70 per barrel in late February to a peak near $120 in the first week of the conflict. They have since settled around $90, sustained by the release of strategic reserves by the United States and its allies and by the expectation that military operations will eventually reopen the strait. But the price of oil is only the most visible expression of the disruption.

Liquefied natural gas shipments through the strait have been halted entirely. Up to 30 percent of global fertilizer exports, primarily from Qatar and Saudi Arabia, transit the same waterway. Container shipping rates for alternative routes around the Cape of Good Hope have tripled since March 1.

The International Energy Agency estimates that every week the strait remains closed costs the global economy approximately $15 billion in direct energy costs alone. The secondary effects (higher input costs for manufacturing, transportation, and agriculture) are harder to quantify but almost certainly larger.

Who Gets Hurt

The United States, thanks to the shale revolution, is the world's largest oil producer and a net energy exporter. It is better insulated from a Gulf supply disruption than at any point in its modern history. Gasoline prices have risen, and they will rise further. But the American economy can absorb a $90 oil price without crisis.

The same cannot be said for much of the world. Pakistan imports approximately 40 percent of its energy and has no strategic reserves to speak of. India, despite its own production, relies on Gulf oil for a substantial share of its refining capacity. Japan and South Korea, two of America's most important Indo-Pacific allies, are almost entirely dependent on imported energy, much of it from the Gulf.

European natural gas markets, still recovering from the disruptions caused by the Russia-Ukraine conflict, are facing a second supply shock in four years. LNG that was flowing from Qatar to European terminals is now stranded on the wrong side of a closed waterway.

The distributional impact is starkly regressive. Wealthy nations have reserves, hedging instruments, and diversified supply chains. Developing nations have none of these. The countries least responsible for the conflict are bearing the largest share of its economic costs.

The Fertilizer Problem

The energy dimension has dominated the coverage, but the fertilizer disruption may prove more consequential over a longer time horizon. Qatar and Saudi Arabia are major exporters of urea and ammonia-based fertilizers, the production of which depends on natural gas feedstocks that are now either unavailable or prohibitively expensive to ship.

The timing is particularly bad. The Northern Hemisphere spring planting season is underway. Farmers in South Asia, sub-Saharan Africa, and Latin America who depend on affordable fertilizer imports are facing either sharply higher costs or outright shortages. The Food and Agriculture Organization has not yet issued a formal warning, but private-sector commodity analysts are already modeling scenarios in which the Hormuz closure contributes to a 10 to 15 percent increase in global food prices by the third quarter of 2026.

This is the kind of second-order consequence that rarely features in the initial decision calculus for military operations but that shapes the geopolitical environment for years afterward.

The Strategic Reserve Question

The United States and its IEA partners have released strategic petroleum reserves to dampen the price spike, and the intervention has had a measurable effect. But strategic reserves are finite and were already depleted by the releases during the Russia-Ukraine crisis. The U.S. Strategic Petroleum Reserve currently holds approximately 370 million barrels. roughly half its capacity and the lowest level since the early 1980s.

If the Hormuz closure extends beyond a month, reserve releases will become increasingly difficult to sustain without creating a different vulnerability: the risk that the United States lacks sufficient reserves to respond to a future disruption.

This is the problem with treating strategic reserves as a price management tool rather than a genuine emergency backstop. Every barrel released today is a barrel unavailable tomorrow.

The Case for Energy Dominance

The Hormuz crisis validates an argument that has been made for years but has often been dismissed as parochial or retrograde: energy independence is a national security imperative, not merely an economic preference.

The United States is in a stronger position than it would have been a decade ago precisely because it invested in domestic production. The countries that are suffering most are those that chose, or were forced by circumstance, to depend on energy supplies that transit a single chokepoint controlled by a hostile power.

The policy implications are straightforward. Domestic oil and gas production should be maintained and expanded, not constrained. Permitting reform for pipelines and LNG export terminals should be accelerated. Allied nations should be encouraged to diversify their energy sources aggressively, including nuclear power, which provides baseload electricity without exposure to hydrocarbon supply chains.

None of this is a short-term fix for the current crisis. But the crisis itself is the most powerful argument available for the policies that would prevent the next one.