By: Razan Hilal, Market Analyst
Oil shipping routes, not production cuts, have become the main source of leverage in the U.S.-Iran war, which is why the energy security system built after the 1973 oil embargo is struggling to contain the shock. That system was designed around a single threat, a producer switching off supply to Western economies, and it answered with strategic reserves, the International Energy Agency and production quotas. The Strait of Hormuz crisis attacks a different link in the oil chain, the shipping routes that carry crude to market. Consequently, the question for the oil market is no longer only how much crude is pumped, but if it can move at all.
Razan Hilal, CMT, StoneX Media Market Analyst, is a Chartered Market Technician with seven years of experience analyzing forex, stocks, commodities and equity indices. Based in Dubai, she covers commodities including crude oil through technical and intermarket analysis, following how Middle East transport risk feeds through to the oil market and the wider macro picture.
"That policy response framework does not seem to have a major impact with respect to the 2026 Hormuz crisis, as the leverage here is related to the energy transportation routes," Hilal says, setting the Hormuz oil shock apart from the one that shaped modern energy policy. In 1973, oil producers cut supply to Western economies, triggering a price spike of more than 300% over several months along with inflation and stagflation across major economies. The response to that oil crisis was built to replace lost barrels, through the Strategic Petroleum Reserve, the International Energy Agency, a stronger petrodollar system and production quotas. None of those tools was designed to secure an oil shipping lane, which explains why the Strategic Petroleum Reserve has cushioned the oil price spike without stopping renewed inflation and stagflation pressure. For oil market participants, the shift means the key risk indicators now include maritime security and route access as well as output decisions.
The Red Sea was supposed to be the oil market's pressure valve, yet Hilal notes that the leverage now reaches "not just at the Strait of Hormuz but now recently across the Red Sea", the main alternative transportation route for oil shipments. Specifically, tensions between Saudi Arabia and the Houthis have brought that backup corridor into the conflict, leaving oil shipping with fewer ways around the Strait of Hormuz. As a result, disruption on one oil route no longer pushes traffic onto a safe second route, and the cost of that risk shows up in both oil prices and inflation. Hilal points to maritime security frameworks, alternative export routes and a potential long-term geopolitical deal between the U.S. and Iran as the kind of responses that could set a clearer energy security path. Until one of those takes shape, oil shipping routes remain the variable that separates an extended escalation from a de-escalation heading toward year end.
--- Written by Gus Farrow, Senior Manager, StoneX Media
--- Expert: Razan Hilal, StoneX Media Market Analyst
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