Hormuz Crisis Costs Fossil Fuel Importers a Record $330 Billion

A new analysis from the Centre for Research on Energy and Clean Air (CREA) has quantified the financial toll of the Hormuz crisis on fossil fuel importers. In the six months following the US-Israel strikes on Iran, importers paid a gross extra cost of USD 330 billion for seaborne crude oil, oil products, and LNG, compared with what pre-war futures markets had expected.

This represents the largest sustained oil price shock since the 1990 Gulf War. According to the report, Asian LNG prices averaged 75% above pre-war expectations during the first six months, European LNG 60% above, diesel 59% above, and crude oil 35% above.

The European Union faced the highest gross additional cost at USD 78 billion, followed by China at USD 35 billion and India at USD 22 billion. The typical low- or middle-income country paid about twice as much relative to GDP as the typical high-income country.