Hormuz and Bab el-Mandeb Oil Disruptions Spark Global Energy System Alert
Two narrow maritime passages in the Middle East hold the world's energy system hostage. The Strait of Hormuz and Bab el-Mandeb are not parallel alternatives, but sequential dependencies within the same export corridor.
Persian Gulf producers, including Saudi Arabia, Iraq, Kuwait, and the UAE, export crude through the Strait of Hormuz into the Gulf of Oman. That oil then transits the Arabian Sea before entering the Red Sea via Bab el-Mandeb, ultimately passing through the Suez Canal toward European and Asian buyers.
A closure of either strait would disrupt the flow, but a simultaneous shutdown creates a supply shock with no modern historical precedent in terms of combined rerouting constraints. Approximately 18.5 million barrels per day of crude oil and condensate flowed through the Strait of Hormuz in 2016, representing roughly 30% of global seaborne-traded oil.
The Bab el-Mandeb carries approximately 9 million barrels per day under normal conditions. Goldman Sachs estimates that roughly 4 million bpd of that volume would be extremely difficult to reroute even under favourable circumstances.