By: Parul Bakshi and Lydia Powell
The following excerpt is from Chapter 3 — Choke Points: How Security and Politics are Impacting Supply Chains of ORF Global Quarterly: Energy and Tech: Powering the Future.
On 4 March 2026, Iranian forces declared the Strait of Hormuz closed following the United States (US)-Israel attack on Iran on 28 February. The disruption has had serious ramifications for global energy security. In 2025, nearly 15 million barrels of crude oil per day—around 34 percent of global crude oil trade—passed through the Strait, with most exports destined for Asian markets. China and India alone received 44 percent of these exports. Yet the closure of Hormuz is not the only recent incident to bring energy security, diversification, and the energy-climate-trade nexus to the forefront.
Over the past decade, three structural shifts have been reordering global energy trade, encompassing not only traditional oil and gas flows but also the rapidly growing cross-border trade in electricity and clean energy goods.
First, supply chains in energy, clean technology, and critical raw materials have become increasingly securitised, with states treating dependencies as national security liabilities rather than economic efficiencies. Second, trade corridors have diversified, driven by geopolitical tensions and infrastructure competition. Third, the relationship between energy security, climate policy, and trade governance has evolved into an increasingly interconnected nexus, where a security shock in energy markets can immediately reprice climate commitments and reshape trade flows, while trade policy instruments such as carbon border tariffs feed back into both energy investment decisions and geopolitical posturing.
The Hormuz disruption has underscored the vulnerability of critical maritime chokepoints to geopolitical tensions and their potential to transmit shocks across supply chains and commodity markets, with repercussions similar to those observed during the three-year COVID-19 pandemic starting in 2020 and the RussiaUkraine conflict that erupted in 2022.
Energy supply chains are increasingly shaped by strategic competition as much as market forces. Learn more about what this shift means for energy security, trade and the global economy in ORF Global Quarterly: Energy and Tech: Powering the Future.