For fear of a jump in prices.. How do oil markets face scenarios of closing the Strait of Hormuz?

Possible scenarios for closing the Strait of Hormuz are at the forefront of global economic and geopolitical concerns, as this vital waterway represents a major artery for international oil and gas supplies, which prompts major countries and producers to establish strategic precautions and build “safety cushions” to limit violent repercussions on energy markets and the growth of the global economy.

Economic analyzes indicate that the threat of closing the strait, through which about a fifth of global oil consumption passes, prompts consuming countries to enhance their strategic oil reserves to ensure the continuity of supplies for longer periods in the event of any escalation. These reserves act as a primary buffer to absorb spot price shocks and prevent sharp jumps that may paralyze the production and transportation sectors.

On the other hand, exporting countries and international companies are seeking to develop and activate alternative routes and pipeline networks to transport crude away from the waterway, in addition to investing in energy alternatives and increasing the flexibility of supply chains.