2023 Research and Study
- NEWCommentary
- publication date:2026/03/31
Asia's Oil Supply Chains Disrupted by the Blockade of the Strait of Hormuz
MEIJ Commentary No.24
Masahide TAKAHASHI,
Senior Research Fellow, Middle East Institute of Japan
Introduction
Following the surprise attack on Iran by the United States and Israel on February 28, 2026, Iran has intensified its military activities in the Persian Gulf region. Against this backdrop, a de facto blockade of the Strait of Hormuz may have serious repercussions not only for Asian countries’ crude oil procurement but also for the global oil supply chain.
Disruption of energy supplies from the Middle East
Following the sudden escalation of tensions in Iran, the Strait of Hormuz—through which large volumes of oil and liquefied natural gas (LNG) pass daily—has effectively been blocked. Amid Iran’s intimidation of ships, as well as soaring marine insurance premiums and the suspension of coverage, many shipping and trading companies are refraining from navigating the Strait of Hormuz. As a result, the number of vessels passing through the waterway dropped sharply from 95 on February 27—the day before the attack—to just 7 on March 1, and has since remained below 10 (Figure 1).
Figure 1: Number of Vessels Transiting the Strait of Hormuz
(Source) Created based on IMF PortWatch
The Strait of Hormuz is the primary export route for crude oil and petroleum products produced in Saudi Arabia, Iraq, the United Arab Emirates (UAE), Iran, Kuwait, Qatar, Bahrain, and the Saudi–Kuwaiti neutral zone. In 2025, approximately 14.94 million bpd of crude oil—accounting for about 34% of global crude oil trade—and 4.92 million bpd of petroleum products
passed through the waterway, most of which were destined for Asian markets (Figure 2).
Figure 2: Crude Oil and Petroleum Product Exports via the Strait of Hormuz (2025)
(Source) Compiled based on IEA data
With the Strait of Hormuz effectively closed, oil shipments from countries other than Iran have been physically cut off, and few alternative routes are available. First, Saudi Arabia operates an east–west crude oil pipeline (with a transport capacity of 5–7 million bpd) stretching approximately 1,200 km from the eastern oil-producing region of Abqaiq to the western port city of Yanbu on the Red Sea. Next, the UAE operates an approximately 360-km pipeline (with a capacity of 1.5 to 1.8 million bpd) connecting the oil-producing region of Habshan in Abu Dhabi to the port city of Fujairah, located on the Indian-Ocean side of the Strait of Hormuz. Saudi Arabia has increased crude oil exports from the Port of Yanbu, which allows shipments to bypass the Strait of Hormuz. According to vessel-tracking data compiled by Bloomberg, a U.S. news agency, exports from Yanbu rose from 1.9 million bpd on March 5 to 2.93 million bpd on March 10, and further expanded to 3.79 million bpd by March 17.
However, given the limited combined capacity of these alternative routes in Saudi Arabia and the UAE (totaling 6.5 to 8.7 million bpd), it will be difficult to attain oil transit volumes comparable to those in 2025 (approximately 20 million bpd). Furthermore, repeated attacks on the Port of Fujairah (at least three times between March 14–17) have caused frequent interruptions in crude oil loading operations. In Saudi Arabia’s Yanbu Port, crude oil loading was temporarily disrupted on March 19 due to a drone attack on the port’s SAMREF refinery. Iran’s successive attacks are a cause for concern in terms of the stability of export routes that bypass the Strait of Hormuz.
India's status as an “oil-exporting country”
The closure of the Strait of Hormuz is significantly impacting India’s energy policy. As it has the world’s largest population and has had sustained economic growth since the 1990s, India’s oil consumption has increased annually. According to The Energy Institute, India’s oil consumption grew at an average annual rate of 4% between 2014 and 2024, making it the world’s third-largest oil consumer, behind only the United States and China. Meanwhile, domestic crude oil production has declined since peaking in 2011; therefore, India must secure large quantities of crude oil from overseas to support its citizens’ livelihoods and economic activities.
In terms of India’s crude oil imports by country, Russia’s share rose from 1% in 2018 to 35% in 2024, causing the proportion of imports from Persian Gulf countries to decline from 63% to 46% (Figure 3). India’s imports of Russian crude oil have contributed to securing a stable oil supply and reducing its dependence on Middle Eastern oil. However, imports from Middle Eastern oil-producing countries, which are geographically close to India, require fewer days and lower transportation costs than imports from other regions and can be procured stably; therefore, from the perspective of energy security, they represent an ideal supply route for India.
Figure 3: India's Crude Oil Imports by Country (2018–2025)
(Source) Compiled based on statistics from the Ministry of Commerce and Industry, India
Furthermore, India is one of the world’s leading exporters of petroleum products, refining crude oil sourced from various regions and supplying products to approximately 160 countries and territories. Production of petroleum products far exceeds domestic demand, and the surplus is allocated for export. According to the Ministry of Statistics and Programme Implementation , of the petroleum products produced in fiscal year 2023 (April 2023–March 2024), 30% of gasoline, 24% of diesel, 28% of naphtha, and 50% of jet fuel were exported. As of 2024, India’s refining capacity was 5.17 million bpd, ranking fourth globally behind the United States, China, and Russia. India’s petroleum product exports also surpass those of the major oil-producing nation of Saudi Arabia, placing it fourth worldwide.
Amid the war in Ukraine, India has sought to expand exports to Europe, where Russian petroleum products have been excluded from the market and where higher profit margins are anticipated. India’s petroleum product exports to Europe surged from 11.84 million tons in 2021 to 27.48 million tons (26% of total exports) in 2023, and remained high at 26.20 million tons (27%) in 2024. Europe has become a key market for India, on par with Asia, Africa, and the Middle East (Figure 4). For India to maintain its status as a petroleum product exporter while benefiting from the energy market destabilization caused by the war in Ukraine, it must secure crude oil supplies that exceed domestic demand. Therefore, if imports of Middle Eastern crude oil decline significantly because of the prolonged conflict in Iran, India will be unable to maintain its current export levels.
Figure 4: Regional Exports of Indian Petroleum Products (2018–2025)
(Source) Compiled based on statistics from the Ministry of Commerce and Industry, India
Japan faces shortages of crude oil and naphtha
The closure of the Strait of Hormuz is a major concern for Japan’s energy supply. Since Japan joined Western nations in suspending imports of Russian crude oil in 2022, it has been importing nearly all of its crude oil from Gulf oil-producing countries. Japan’s dependence on the Middle East for crude oil reached approximately 94% by 2025, with 90% of its crude oil imports passing through the Strait of Hormuz. Currently, Saudi Arabia and the UAE are continuing to export crude oil to some extent via routes that bypass the Strait of Hormuz. However, given the limited transport capacity of crude oil pipelines and occasional suspensions of loading operations due to safety concerns arising from Iranian attacks, crude oil imports from these two countries are likely to remain well below previous levels.
Amid this situation, naphtha—a petroleum product—is facing growing supply concerns in Japan alongside crude oil. Naphtha is a basic raw material used in the petrochemical industry and obtained by refining crude oil. It is used to produce ethylene and propylene through thermal cracking, which are then used to manufacture a wide variety of products, including plastics, synthetic fibers, detergents, and packaging materials. Therefore, naphtha is a critical material that supports a broad range of sectors, ranging from daily necessities to industrial products.
Among petroleum products, naphtha is particularly dependent on overseas sources. In fiscal year 2024, 64% of supply was covered by imports, with sources heavily concentrated in Gulf countries such as the UAE, Qatar, Kuwait, Bahrain, and Saudi Arabia. The Middle East accounts for 47% of Japan’s total supply of crude oil. Compared to liquefied petroleum gas—another petroleum product with a high degree of dependence on the United States (53%)—naphtha supply exhibits an even more pronounced reliance on the Middle East. Given that attacks on Iranian energy facilities have also extended to the Ruwais Refinery in the UAE and the Mina Ahmadadi and Mina Abdullah refineries in Kuwait, naphtha supplies from the Middle East may remain constrained in the medium to long term, even if navigation through the Strait of Hormuz resumes.
Figure 5: Japan’s Petroleum Product Production and Share of Imports by Country (FY2024)
(Source) Compiled based on statistics from the Agency for Natural Resources and Energy, Ministry of Economy, Trade, and Industry
Another factor exacerbating Japan’s petroleum product shortage is South Korea’s move to restrict exports of petroleum products. At a cabinet meeting on March 17, the Minister of Trade, Industry and Energy announced a plan to cap the export volumes of petroleum refiners as part of measures to stabilize domestic supply. In fiscal year 2024, South Korean products accounted for 18% of Japan’s kerosene supply, 9% of gasoline, 7% of naphtha, and 6% of diesel fuel. Consequently, if imports from South Korea were to cease, Japan’s petroleum product supply would become even more strained.
Like Japan, South Korea imports nearly all of its crude oil from overseas. In 2025, the breakdown of Middle Eastern crude oil imports was as follows: Saudi Arabia accounted for 33.6%, the UAE for 11.4%, Iraq for 10.4%, Kuwait for 8.5%, Qatar for 4.4%, and Oman for 0.7% (Figure 6). Although South Korea’s dependence on the Middle East is lower than that of Japan—at approximately 69%—its reliance on Iraq, Kuwait, and Qatar—countries that cannot bypass the Strait of Hormuz—reaches approximately 23%. Consequently, the closure of the Strait of Hormuz has significantly disrupted South Korea’s crude oil procurement. Given that South Korea cannot increase its crude oil imports for the time being, the supply of petroleum products to Japan is also expected to stagnate.
Figure 6: South Korea’s Crude Oil Imports by Country (2020–2025)
(Source) Compiled based on statistics from the Korea Energy Economics Institute
As described above, the disruption of energy supplies from Middle Eastern countries caused by the closure of the Strait of Hormuz not only makes it difficult for Asian nations to procure crude oil but also severely disrupts the oil supply networks of countries that rely on petroleum product exports. Even if countries can respond in the short term by releasing oil reserves, prolonged disruption is likely to lead to escalating economic losses if sufficient crude oil cannot be secured to restore normal supply chain operations.
(Written in March 23, 2026)
