PARIS — The head of the International Energy Agency (IEA) warned Wednesday that the global economy could face significant consequences if disruptions to shipping through the Strait of Hormuz continue for an extended period, underscoring growing concerns that the world’s most important energy corridor has become a major threat to economic growth and financial markets.

Speaking as oil traders, governments and multinational companies closely monitor developments in the Persian Gulf, IEA Executive Director Fatih Birol said the international community cannot afford a prolonged interruption to energy flows through the narrow waterway, which carries roughly one-fifth of the world’s oil supply and a substantial portion of global liquefied natural gas exports.

“If this situation continues for several weeks, it will have major implications for the global economy,” Birol said, urging governments to work toward restoring stability in one of the world’s most strategically important shipping routes.

His warning comes as heightened tensions involving Iran have renewed concerns over commercial shipping through the Strait of Hormuz, a passage connecting the Persian Gulf with the Gulf of Oman and the Arabian Sea. The waterway serves as the primary export route for crude oil produced by Saudi Arabia, Iraq, Kuwait, Qatar, the United Arab Emirates, and Iran, making it indispensable to global energy markets.

While oil prices have risen sharply amid fears of supply disruptions, the IEA stressed that the longer-term economic consequences could extend well beyond energy markets. A sustained interruption would increase transportation costs, raise fuel prices, add inflationary pressure and create additional uncertainty for manufacturers, airlines, shipping companies and consumers worldwide.

Brent crude has climbed above $85 a barrel as traders price in geopolitical risk premiums, reversing much of the decline seen earlier this year. Energy analysts say markets remain highly sensitive to any indication that commercial tanker traffic could be restricted or delayed.

The IEA said it continues to monitor global inventories and remains in close communication with member governments regarding emergency preparedness. The agency was established following the 1970s oil crisis to coordinate responses to major supply disruptions and maintains strategic petroleum stockpiles among its member nations that can be released if necessary.

Birol noted that global oil markets remain adequately supplied for now, but emphasized that prolonged instability would present a far greater challenge than a short-term interruption. He said governments should avoid complacency simply because physical shortages have not yet emerged.

Energy companies have already begun adjusting shipping routes, reviewing insurance costs and reassessing security measures for vessels operating near the Gulf. Maritime insurers have increased premiums for ships entering the region, while some operators have delayed sailings until the security environment becomes clearer.

The uncertainty is also being closely watched by central banks, many of which have spent the past year bringing inflation under control following the sharp price increases that followed the pandemic and earlier geopolitical conflicts. A sustained increase in crude oil prices could complicate those efforts by raising gasoline, diesel, aviation fuel and freight costs across major economies.

Businesses dependent on international shipping are also monitoring the situation closely. Higher transportation expenses typically ripple through supply chains, increasing costs for manufacturers and retailers before eventually reaching consumers through higher prices.

Financial markets have reacted cautiously, with investors shifting toward energy producers while reducing exposure to industries most vulnerable to rising fuel costs, including airlines, transportation companies and some manufacturers. Commodity traders say volatility is likely to remain elevated until markets gain greater clarity about the security of commercial shipping through the region.

Despite the growing concern, the IEA stopped short of forecasting a supply crisis, noting that oil-producing nations and consuming countries retain significant emergency resources should conditions deteriorate further. The agency also emphasized that the ultimate economic impact will depend largely on how quickly stability returns to the region.

For now, Birol’s warning serves as a reminder that the Strait of Hormuz remains one of the world’s most critical economic chokepoints. Any prolonged disruption would not simply affect oil-producing nations—it would reverberate across global trade, transportation, manufacturing and financial markets, potentially slowing economic growth far beyond the Middle East.

JBizNews Desk | Paris

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