Hormuz crisis exposed the world's energy weak spots: Why the next shock could hurt more

The Strait of Hormuz crisis has demonstrated that the global energy system can absorb a major supply shock — but it has also exposed how quickly its safety buffers can run thin.

A new analysis by the McKinsey Global Institute says the 2026 disruption was the largest recent energy-supply shock, affecting a peak of 14% of global oil and gas supply. That was more than twice the relative impact of the major oil shocks of the 1970s and more than six times the peak impact of the Russia-Ukraine disruption in 2022.

The bigger concern, however, is what happens after the immediate crisis. Energy security is increasingly becoming a structural problem involving shipping routes, pipelines, refining capacity, inventories and geopolitical dependencies.

Hormuz was only the beginning  

Around 21 million barrels per day (mb/d) of oil flowed through Hormuz in the fourth quarter of 2025, including about 16 mb/d of crude and 5 mb/d of refined products.

When the disruption hit, global markets adjusted through several shock absorbers. McKinsey estimates that reduced oil consumption accounted for roughly 45% of the lost supply, or 6.8 mb/d. Other volumes were compensated through alternative routes, inventories and changes in global trade flows.

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China reduced imports while the US increased exports, effectively rewiring parts of the global market.

But those buffers are not unlimited.

Prices have risen, inventories have fallen, refinery systems have come under greater pressure and alternative infrastructure has itself become vulnerable. The disruption to Saudi Arabia's East-West pipeline, one of the key routes designed to bypass Hormuz, underscored that problem.

World's energy trade has a chokepoint problem  

The vulnerability extends far beyond Hormuz.

According to MGI, two-thirds of global energy trade passes through maritime chokepoints. The Strait of Malacca carries roughly 23 mb/d of oil and refined products, while Hormuz handles about 21 mb/d. Other important routes include the Cape of Good Hope, Suez Canal, Turkish Straits, Bab el-Mandeb and Panama Canal.

That means simply reducing dependence on Hormuz does not eliminate the underlying risk. It can shift exposure to another strategic route.

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The risks around Yemen and the Red Sea have already highlighted this vulnerability, adding another layer of uncertainty to global shipping and energy flows.

Pipelines can provide insurance but not a solution  

Countries are responding by accelerating investments in bypass pipelines, alternative oil and gas supplies, electrification and other forms of diversification.

McKinsey estimates that measures already under way or under discussion could offset 35% to 70% of pre-crisis oil flows through Hormuz by 2030 if another major disruption occurs. That would represent roughly 7-15 mb/d, or 7-15% of global oil supply.

But there is a trade-off.

Pipelines can provide an alternative to vulnerable maritime routes, but they connect fixed points and cannot simply be redirected when geopolitical circumstances change. Backup infrastructure can also remain underused for years, effectively functioning as insurance whose value becomes apparent only during a crisis.

India & China have a different advantage  

McKinsey places India and China in a category it describes as "hedgers with a coal backbone". Both are major net energy importers, but large domestic coal resources give them the ability to switch fuels during a supply disruption.

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That provides a degree of domestic cushioning that many other import-dependent economies lack. At the same time, the vulnerability remains significant: McKinsey estimates that 84% of their energy trade passes through maritime chokepoints.

For India, the Hormuz shock has reinforced the importance of crude diversification, strategic reserves, alternative shipping routes, domestic refining capacity and the ability to switch between fuels.

The LNG market illustrates the challenge. The disruption pushed Asian spot LNG prices from around $10 per million British thermal units before the war to nearly $30, while India and other Asian buyers turned to coal and oil as alternatives.