Iran Sets Demands to Reopen Strait of Hormuz Amid Tensions with US

What Happens Next

• →War-risk insurance premiums for vessels transiting the Strait of Hormuz rise 200-400%, prompting some tanker operators to reroute via the Cape of Good Hope, adding 10-15 days to delivery schedules for Asian-bound crude.
• →Brent crude prices spike $8-15/barrel as markets price in potential supply disruptions affecting the ~20 million barrels/day that transit the strait.
• →Gulf states — particularly the UAE and Saudi Arabia — accelerate pipeline capacity expansion to bypass the strait, including increased throughput on the Habshan-Fujairah and East-West pipelines.
• →Asian importers (Japan, South Korea, India) draw down strategic petroleum reserves and negotiate increased supply commitments from non-Gulf producers such as the US, Brazil, and Guyana.

Near-term: Brent crude rises $8-15/barrel; shipping insurers impose surcharges on Hormuz transit; tanker traffic through the strait drops 15-25% as operators reroute or delay shipments. Long-term: A permanent risk premium embeds into Gulf-sourced crude pricing, accelerating the competitive position of US shale, Guyanese offshore, and Brazilian pre-salt output relative to Persian Gulf supply.