Archive · 29 Jul 2026
Dual chokepoint shutdown may push Brent to $135
There are tensions in the Middle East that could lead to the closure of two important shipping routes, the Strait of Hormuz and Bab-el-Mandeb.
If both routes are closed, the price of oil could go up a lot, maybe to $135 per barrel.
This would make things more expensive for India, which gets a lot of its oil and gas through these routes.
It could also make it harder for Indian companies to borrow money because their costs would go up and their supply chains could be disrupted.
Some experts think the price of oil might not go up as much because markets have already prepared for this, but others think it could go up a lot.
Simultaneous closure of Strait of Hormuz and Bab-el-Mandeb could push Brent crude to $130–135 per barrel.
Maritime traffic data showed 53 confirmed vessel crossings on July 28, with Hormuz recording 12 transits and Bab-el-Mandeb 41.
Around 40% of India’s crude imports and significant LNG and LPG supplies pass through Hormuz.
The Red Sea carries roughly 50% of India’s exports and 30% of its imports.
Potential disruptions could elevate input costs, disrupt supply chains, and weaken operating cash flows for Indian corporates.
- Who
- CareEdge Ratings, PwC India, J.P. Morgan analysts
- What
- Potential closure of Strait of Hormuz and Bab-el-Mandeb due to West Asian tensions
- When
- Current tensions and potential disruptions ongoing
- Where
- Strait of Hormuz and Bab-el-Mandeb
- Why
- To prepare for closure if the US strikes critical Iranian infrastructure and due to attacks on Saudi oil vessels
Market Optimists
Market Pessimists
Price Impact
Market Optimists
The increase in crude prices is not as fast as expected because markets have already factored in the crisis and alternative routes are being reactivated.
Market Pessimists
A simultaneous closure of the Strait of Hormuz and the Red Sea could trigger a sharp surge in global energy prices, with Brent crude potentially rising to $130–135 per barrel.
- Brent Crude Price Estimates
- $95 (partial disruption), $120 (four-week full closure), $135 (eight-week full closure)
- Maritime Traffic
- 53 confirmed vessel crossings on July 28 (12 through Hormuz, 41 through Bab-el-Mandeb)
- Impact on India
- 40% of crude imports, significant LNG and LPG supplies through Hormuz; 50% of exports and 30% of imports through Red Sea
- Potential Voyage Impact
- Cape of Good Hope diversions could add 4,000–6,000 nautical miles and up to 20 days to voyages
- Credit Pressure
- Elevated input costs, disrupted supply chains, and weakened operating cash flows for Indian corporates