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Strait of Hormuz Closed, Disrupting 20% of Global Oil Supply
The Strait of Hormuz has been closed for six weeks, marking the biggest supply disruption in global oil market history. This has led to gasoline and diesel shortages, fertilizer price spikes, and potential GDP impacts. Countries are accelerating domestic energy production in response.
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The Strait of Hormuz has been closed for six weeks as of May 5, 2026, removing supply from global markets in what the International Energy Agency has called the largest supply disruption in the history of the global oil market. The closure could shave nearly three percentage points off global GDP growth this quarter, according to the Dallas Federal Reserve.
Barrels that did not ship through the Strait of Hormuz in March 2026 are causing gasoline shortages in April 2026 and diesel shortages in May 2026.
The energy crisis is resulting in fertilizer price spikes as farmers across the Northern Hemisphere are planting in 2026. Roughly 45% of the world’s seaborne sulfur trade originates from Gulf refineries, which are now operating at reduced capacity or shut down entirely due to the crisis. Spain has added over 40 gigawatts of solar and wind capacity since 2019.
Gas sets Spain’s wholesale electricity price in about 15% of hours, according to the energy think tank Ember. Spain’s forecast average power price for the rest of 2026 is around €66 per megawatt-hour. In contrast, gas sets Italy’s wholesale electricity price in 90% of hours, Ember data shows.
The United States has over 65 gigawatts of solar module manufacturing capacity as of 2026, up from 8 gigawatts in 2022. For the first time in more than a decade, every major link in the solar supply chain is being produced domestically in the United States.
