In August 2025, MHD examined the potential consequences of a disruption in the Strait of Hormuz, one of the world’s most critical maritime chokepoints. At the time, analysts suggested that while tensions in the Middle East had prompted warnings about restricting access to the Strait, a full closure remained unlikely due to the economic and geopolitical risks involved.
Half a year later, those risks are no longer theoretical.
Over the past several days, commercial maritime traffic through the Strait has slowed dramatically following a series of attacks on vessels and infrastructure across the Gulf region. Reports indicate tanker movements have dropped sharply as shipping companies and insurers reassess the safety of the route, effectively paralysing large portions of energy shipments through the corridor.
The Strait of Hormuz sits between Iran and Oman and remains one of the world’s most important shipping routes. Roughly one-fifth of global oil consumption and a substantial share of liquefied natural gas exports pass through the narrow waterway each day.
In recent days, tanker movements have declined sharply as shipping companies and insurers reassess the operating environment in the region. A number of vessels have reportedly been struck or damaged near the Gulf, while maritime authorities have also recorded explosions close to commercial ships operating near the United Arab Emirates.
Shipping data suggests the disruption has already begun affecting tanker movements across the Gulf. According to Lloyd’s List Intelligence, around 200 internationally trading, non-sanctioned tankers are effectively stranded in the Middle East Gulf, either anchored, berthed at terminals or slow steaming while operators assess the situation.
The congestion is particularly visible among very large crude carriers (VLCCs), with 60 vessels currently inside the Gulf, representing almost 8 per cent of the global compliant VLCC fleet. Of these, 13 are alongside loading terminals, 33 are anchored and 14 are slow steaming as owners and charterers consider their next steps. In the Suezmax segment, 23 vessels remain in the Gulf, with five berthed and the remainder waiting offshore or proceeding at reduced speeds.
The slowdown in tanker traffic has already begun influencing global energy markets, with oil prices rising as traders respond to potential supply disruptions. Brent crude briefly traded around US$83 per barrel, roughly 10–13 per cent higher than levels recorded before the disruption.
While the Strait carries a significant share of global energy supply, Australia’s direct reliance on Middle Eastern oil is relatively limited. Most of the country’s crude oil imports come from suppliers such as Malaysia, the United States, Vietnam and Brunei.
However, Australia remains indirectly exposed to disruptions in the region. A large portion of the refined petroleum products imported from countries such as Singapore and South Korea are produced using crude oil sourced from the Middle East and transported through the Strait.
Resources Minister Madeleine King says the government is closely monitoring developments but remains confident in Australia’s energy security.
“Australia is very well supplied for gas at this time,” King says. “The ACCC and AEMO have confirmed this.”
She says policy measures introduced after the 2022 energy crisis have strengthened the country’s ability to manage supply volatility.
“All the policies we brought together at that time mean we have a much more resilient energy and gas market system,” King says.
One area where Australia could see some pressure is fertiliser supply, particularly urea used in agriculture.
“Australia is reliant on imports of urea,” King says. “Half of our urea imports do come through the Strait of Hormuz.”
King says existing stockpiles and alternative suppliers should help manage any short-term disruption while domestic production capacity expands.
“There is a urea project underway right now, the Perdaman Urea Project in Karratha,” she says. “That will be producing urea and make us basically independent in terms of that fertiliser component.”
