Will the Crisis End if the Strait of Hormuz Opens? The New Paradigm of Energy Security and the Lasting Effects of Geopolitical Risks

Developments in the Strait of Hormuz have been among the most hotly debated topics in the international public sphere in recent days. In particular, the escalating tensions between Iran and Israel, coupled with the US’s increased military presence in the region, have brought discussions regarding the future of the Strait of Hormuz—one of the world’s most critical energy chokepoints—back to the forefront. In this context, a frequently asked question is: If the Strait of Hormuz were to resume full-capacity operations, would the global economy breathe a sigh of relief?

At first glance, the answer to this question appears to be ‘yes’. After all, approximately 20 per cent of global oil trade and a significant portion of liquefied natural gas (LNG) trade pass through this narrow waterway. However, from an energy security perspective, the issue is far more complex. This is because, in today’s energy system, crises do not stem solely from physical supply disruptions. The key determining factor is the perception of geopolitical risk in the markets and its impact on economic behaviour. Consequently, the reopening of the Strait of Hormuz may allow tankers to resume their journeys; however, it does not guarantee that the confidence lost in the markets will return at the same pace.

This situation is, in fact, a consequence of the paradigmatic shift in the understanding of energy security. In the post-Cold War era, energy security was largely defined through the concept of supply security. The physical availability of energy resources and their ability to be delivered to consumer countries were regarded as the primary priorities. However, developments over the past twenty years have demonstrated that this approach is no longer sufficient. The Russia–Ukraine War, security crises in the Red Sea, global supply chain issues and the new dependencies created by the energy transition have demonstrated that energy security is a multi-dimensional issue.

Today, energy security is assessed not only in terms of access to energy resources, but also in conjunction with the predictability of energy prices, the resilience of supply chains, the security of transport corridors and geopolitical stability. In other words, energy security is no longer merely a physical issue; it has also acquired psychological, economic and strategic dimensions.

Discussions regarding the Strait of Hormuz must also be assessed within this new paradigm. This is because the factor determining prices in energy markets is not solely the current supply-demand balance. Expectations, perceptions of risk and future scenarios are also key components of the pricing mechanism. Indeed, many price movements in international oil markets emerge before any physical supply disruptions actually occur. Markets often price in potential risks rather than actual events.

For this reason, the fact that the Strait of Hormuz is open is not sufficient in itself. What matters is that market participants believe the strait will remain open in the future. If investors, energy companies and insurance organisations believe there is a high probability of a new crisis, the risk premium will continue to be factored into prices. It is at this point that a direct link between energy security and geopolitics becomes apparent.

In the literature on energy geopolitics, critical straits are not merely regarded as transport corridors. These points are also strategic junctions where the global power struggle intensifies. In this context, the Strait of Hormuz is not merely a sea route; it is also a geostrategic area where the interests of the US, Iran, China, the Gulf states and Europe converge.

The transformations in the international system, particularly in recent years, have further heightened the importance of such regions. Changes in the global balance of power are intensifying competition over energy corridors. China’s growing energy needs, the US’s efforts to maintain naval supremacy, Russia’s use of the energy card as a strategic tool, and the increasing influence of regional powers are transforming energy transit points into arenas of not only economic but also political and military competition.

At this juncture, it would be insufficient to assess the Strait of Hormuz solely from an energy perspective. In fact, the developments unfolding here reflect the new geopolitical paradigm emerging within the international system. The understanding of globalisation that prevailed following the Cold War was based on the assumption that energy flows could be maintained in an uninterrupted and secure manner. However, this assumption is now gradually weakening. Trade routes, energy corridors and critical infrastructure are once again taking centre stage in strategic competition.

This situation is becoming even more complex alongside the energy transition process. This is because, whilst the energy transition aims to reduce dependence on fossil fuels on the one hand, it is creating new dependency relationships on the other. Critical minerals, rare earth elements, battery technologies and clean energy equipment are emerging as new arenas of geopolitical competition. Consequently, the energy transition does not eliminate energy geopolitics; rather, it is reshaping it through different resources and different geographies.

Within this framework, the importance of the Strait of Hormuz will continue in the short and medium term. A significant portion of the global economy still relies on the consumption of oil and natural gas. The widespread adoption of electric vehicles, increased investment in renewable energy and the adoption of carbon-neutral targets have not yet altered this reality. A significant proportion of hydrocarbon resources, which continue to form the backbone of the global energy system, reaches world markets via the Strait of Hormuz.

From an economic perspective, any instability in the Strait of Hormuz affects not only energy prices but also global economic growth. Rising energy costs increase production costs, intensify inflationary pressures and complicate central banks’ monetary policies. As a result, investment decisions are postponed, economic growth slows down and global trade is adversely affected.

In fact, what is particularly noteworthy here is that the impact of geopolitical risks is felt more on economic expectations than on their physical effects. This is because modern economies tend to avoid uncertainty. When uncertainty rises, investors reduce their appetite for risk, companies postpone new investments, and volatility in financial markets increases. Consequently, even if the Strait of Hormuz were to reopen, the effects of the uncertainty created during the crisis could persist for a long time.

A similar picture emerges when the issue is assessed from Turkey’s perspective. Although Turkey is not among the countries that import oil directly via the Strait of Hormuz, it is an integral part of global energy markets. Any rise in oil prices increases Turkey’s energy import costs, adversely affects the current account balance and heightens inflationary pressures. For this reason, developments in the Strait of Hormuz are not merely a matter of foreign policy or security for Turkey, but also a matter of economic security.

The steps Turkey has taken in recent years to diversify its energy sources are of strategic importance in this regard. Black Sea natural gas, investments in renewable energy, the development of LNG infrastructure and the emphasis placed on energy diplomacy are enhancing Turkey’s resilience to external shocks. However, it is not possible to remain entirely immune to the effects of geopolitical upheavals in global energy markets.

Consequently, the reopening of the Strait of Hormuz could provide significant relief for global energy markets. However, it would be misleading to assume that this development will instantly resolve economic problems. This is because, in today’s world, energy security does not merely mean the physical transport of oil. Energy security is also a matter of predictability, stability and trust.

The example of the Strait of Hormuz clearly illustrates the new paradigm of energy security. The issue is no longer merely the availability of energy resources, but under what conditions, at what cost, and how securely these resources can be transported. Consequently, the reopening of the strait may allow tankers to resume their journeys; however, rebuilding the lost trust requires a much longer and more complex process.

In today’s international system, where geopolitical risks are steadily increasing, the key question is not whether the Strait of Hormuz is open, but to what extent the global energy system is resilient. The future of energy security will also depend to a large extent on the answer to this question.