Two Options for the Strait of Hormuz in a Decarbonized World
Why it matters: The Strait of Hormuz will remain a critical maritime chokepoint for 45% of internationally traded hydrogen by 2050.
- The International Energy Agency (IEA) reports that in 2025, approximately 25% of the world’s seaborne oil trade and over 110 billion cubic meters of LNG moved through the Strait of Hormuz, serving as the primary export route for seven key Gulf nations.
- Reuters highlights the immediate impact of a Strait closure, noting disruptions not just to fuel flows but also to fertilizer, shipping, and food systems.
- Decarbonization commentary often oversimplifies the dissolution of chokepoint risks, failing to account for a future where energy security still depends on ports, tankers, and shipping lanes for imported e-fuels, ammonia, and methanol.
- Gulf states are incentivized to preserve their export economies by replacing oil and gas with ammonia, synthetic fuels, and hydrogen derivatives, leveraging existing capital, infrastructure, and shipping access.
- IRENA's 1.5°C scenario predicts that by 2050, about one-quarter of global hydrogen demand will be internationally traded (compared to 74% for oil today), with 45% moving by ship, predominantly as ammonia, and global ammonia demand rising to 690 million tons per year.
The Strait of Hormuz, a critical chokepoint for global oil and LNG trade, will remain a significant risk in a decarbonized future, even as the world shifts to e-fuels and hydrogen derivatives. While the International Renewable Energy Agency (IRENA) projects a lower level of cross-border dependence for hydrogen compared to oil, the continued reliance on maritime transport for ammonia and synthetic fuels means vulnerabilities persist, particularly for Gulf states aiming to transition their export economies.
