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The world is facing what the International Energy Agency (IEA) chief Fatih Birol has called “the biggest energy crisis in history” — and the numbers are proving him right. Since the Strait of Hormuz was effectively shut down on February 28, 2026, following coordinated US and Israeli strikes on Iran, global liquefied natural gas (LNG)
The world is facing what the International Energy Agency (IEA) chief Fatih Birol has called “the biggest energy crisis in history” — and the numbers are proving him right. Since the Strait of Hormuz was effectively shut down on February 28, 2026, following coordinated US and Israeli strikes on Iran, global liquefied natural gas (LNG) prices have spiraled to levels that are breaking household budgets and forcing governments into emergency energy protocols.
Asian benchmark LNG prices surged from roughly $10.75 per million British thermal units (MMBtu) in February to as high as $20.81/MMBtu in March 2026 — a near-doubling in a single month. Weekly spot prices in East Asia remain above $10.73/MMBtu, and analysts warn there is no quick reversal in sight as the Iran-US war enters its fourth month with negotiations stalled.
The Hormuz Shutdown did not happen in isolation. The strait — a narrow 21-mile-wide waterway between Iran and Oman — is the single most critical chokepoint in global energy trade. It carries 20% of the world’s daily oil supply and 20% of global LNG. When Iran’s Revolutionary Guard Corps (IRGC) began boarding merchant vessels, laying sea mines, and blocking passage after the February strikes that killed Supreme Leader Ali Khamenei, the ripple effects were immediate and global.
More than 1,550 commercial vessels carrying 22,500 mariners remain stranded in or around the strait as of early June, according to shipping intelligence firm SeaVantage. Oil prices breached $120 per barrel within weeks of the closure, and the Dallas Federal Reserve estimates the disruption could reduce global real GDP growth by an annualized 2.9 percentage points in Q2 2026 alone.
US LNG exports, meanwhile, have surged to a record high of 573.5 billion cubic feet gaseous equivalent, as desperate European and Asian buyers scramble for alternative supply — driving up the cost further for everyone.
The Global Energy Crisis is not hitting equally. Nations most dependent on Middle Eastern energy imports are bearing the sharpest pain.
The IEA has warned in a special June bulletin that the crisis is now threatening the world’s most vulnerable populations through cooking fuel shortages, with millions at risk of switching back to biomass burning.
A ceasefire between the US and Iran was agreed on April 7–8, 2026, halting active combat. But the Iran-US war latest developments offer little relief on the energy front. Iranian Foreign Minister Araghchi stated as recently as June 3 that there is “no progress on negotiations with the US” on the nuclear file — the central condition Iran has tied to reopening the strait.
White House spokesperson Karoline Leavitt called the continued closure “completely unacceptable” under the ceasefire terms, but US military posture in the Gulf remains on high alert. The US House of Representatives passed a resolution on June 4 to limit President Trump’s war powers — a significant congressional rebuke that adds new political uncertainty to any military enforcement of transit rights.
Presidential-level discussions are reportedly targeting a 60-day window to resolve both the strait access issue and nuclear negotiations, but Gulf shipping insurers have already priced in the risk through the end of Q3 2026.
Energy market analysts hold a cautiously split view. Kpler projects Asian spot prices will average around $10/MMBtu for 2026 as the largest supply wave in LNG industry history — driven by new US, Qatari, and Australian capacity — gradually absorbs some demand pressure. However, that forecast assumes some normalization of Hormuz transit by mid-year, a scenario that remains uncertain.
For now, governments from Manila to London are burning through emergency reserves, signing expensive short-term LNG contracts, and accelerating renewable buildout timelines. The Global Energy Crisis of 2026 has, ironically, done more to fast-track clean energy investment decisions than a decade of climate summits.
One thing is clear: the Strait of Hormuz has never mattered more — and the world is only now reckoning with what it means to lose access to it.
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