S&P Global Vice Chairman Daniel Yergin: Hormuz Strait Crisis is the Largest Energy Disruption in History
S&P Global Vice Chairman Daniel Yergin warned that the closure of the Hormuz Strait due to the Iran conflict is the "largest energy disruption in history." The strait typically handles about 20% of global oil transport, 80% of refined products, and 90% of natural gas flowing to Asia, which has now triggered fuel rationing, industrial production limits, and a shift to coal power in several Asian countries.
Yergin stated that if the crisis lasts for several weeks, it is manageable, but an extension would have a significant impact on the global economy, including the U.S., highlighting the vulnerability of energy supply chains and the direct transmission of geopolitical risks to prices and supply.
Source: Public Information
ABAB AI Insight
This warning highlights the global energy system's high dependence on a single choke point. The Hormuz Strait, as a core channel for oil and LNG, amplifies the structural vulnerability of Asian economies to Middle Eastern energy disruptions, forcing importing countries to respond in the short term through rationing, stockpiling, and alternative fuels. This shock tests the resilience of global supply chains and accelerates the pressure for countries to reallocate energy security.
Structurally, this is a typical event of geopolitical and energy power redistribution. The crisis undermines the stability of traditional energy flows, pushing capital towards diversification routes, non-Russian and non-Middle Eastern supplies, and domestic development, while amplifying the relative advantages of countries with alternative capacities or reserves. Historical disruptions (like the 1970s oil crisis) have led to long-term price re-evaluations and industrial relocations; this one is larger and may further strengthen the weight of energy in constraining global economic growth.
In the long term, the event is situated within the context of energy transition and geopolitical long cycles. It exposes the institutional inertia of a fossil fuel-dominated system while creating an accelerated window for renewables, nuclear energy, and inter-regional interconnected infrastructure. Ultimately, the crisis will reshape productivity, wealth distribution, and the energy pricing power dynamics between nations through price signals and policy adjustments, rather than merely remaining at the level of short-term supply shortages.