Could Hormuz trigger the biggest energy shock in decades, worse than the 1970s and 2022 combined?

Analysts warn a Strait of Hormuz disruption could spark an energy shock bigger than the 1970s oil embargo — and push LNG prices toward 2022-style highs.

• US-Iran strikes risk prolonged oil market disruption
• 31% of global seaborne oil flows through the Strait of Hormuz
• Analysts warn a full closure could triple 1970s oil shock impact

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Oil markets are heading into the new trading week on edge.

Following US strikes on Iran over the weekend, analysts are warning that the real risk is not just a knee-jerk spike when New York trading resumes, but the possibility of a sustained disruption to flows through the Strait of Hormuz.

“At this point, it seems we are looking at a full-scale military conflict between the US and Iran, which would be unprecedented and the trajectory impossible to assess,” Vandana Hari, CEO of Vanda Insights, told CNBC.

If the conflict drags on and retaliation intensifies, she warned, the market could be staring at 'worst-case scenarios for oil,' including a major disruption of Middle East flows, unless the US can ensure tanker traffic continues uninterrupted.

Hormuz: the chokepoint that matters

Positioned between Oman and Iran, the waterway carries about 13 million barrels per day in 2025, roughly 31 percent of all seaborne oil flows, according to Kpler data cited by CNBC. It connects major producers including Saudi Arabia, Iran, Iraq and the United Arab Emirates to global markets.

Any interruption would have immediate consequences for both oil and LNG.

Reuters reported, citing an official with the European Union’s naval mission Aspides, that commercial vessels received VHF radio messages from Iran’s Revolutionary Guards warning that “no ship is allowed to pass the Strait of Hormuz.” Tehran has not formally confirmed any directive to close the waterway, Reuters said, but Iran has repeatedly threatened to block the passage in response to attacks.

For energy markets, the threat alone is enough to reprice risk.

Bob McNally, president of Rapidan Energy Group, described the situation to CNBC as 'a very serious development,' noting global oil and gas markets’ heavy dependence on Hormuz production and transit.

Bigger than the 1970s?

The scale of potential disruption is what has jolted analysts.

Saul Kavonic, head of energy research at MST Marquee, told CNBC that if Iran were to successfully block Hormuz, the impact could be “three times the severity of the Arab oil embargo and Iranian revolution in the 1970s.”

That comparison is not casual. The 1970s oil shocks reshaped global inflation, monetary policy and geopolitical alliances.

In today’s context, Kavonic said, such a disruption could drive oil prices into triple digits while pushing LNG prices back toward the record highs seen in 2022.

The nightmare scenario is not just the loss of Iranian barrels, up to 2 million barrels per day, by some estimates, but a broader disruption to Gulf exports or attacks on regional infrastructure.

“If the Iranian regime feels they face an existential threat, attempts to block the Strait of Hormuz cannot be ruled out,” Kavonic said, though he added that the US and its allies would likely deploy naval escorts to protect shipping lanes.

Gas markets face 2022 déjà vu

The oil market is only part of the equation.

LNG flows through the region are equally vulnerable. A significant interruption could ripple across Europe and Asia, where gas markets are still sensitive after the supply shock triggered by Russia’s invasion of Ukraine in 2022.

The risk is that energy markets move from tight to stressed very quickly.

Brent crude settled at $72.48 on Friday, up about 19 percent year-to-date, while US West Texas Intermediate closed at $62.02, roughly 16 percent higher so far this year, CNBC reported. Those levels could change rapidly if traders begin pricing a prolonged disruption.

The duration question

Industry veterans stress that duration is the key variable.

McNally told CNBC that the magnitude of any oil and LNG spike will depend on how long and how widely Gulf production and transit are disrupted.

Andy Lipow, president of Lipow Oil Associates, described the worst-case outcome as an attack on Saudi oil infrastructure followed by a complete closure of Hormuz. He estimates the probability of that scenario at about 33 percent, given that Iran may feel cornered.

For now, Iranian oil facilities have not been directly targeted. But risk has clearly shifted.