Persistent risks to shipping in the Gulf could fundamentally reshape global oil markets, trade flows, and prices, according to Moody’s.
Dubai: For months, governments, businesses, and financial markets have viewed disruptions in the Strait of Hormuz as a temporary shock likely to fade with diplomatic progress or military de-escalation.
Moody’s Ratings now suggests a shift in that assumption, warning that markets may need to prepare for a more prolonged and structural disruption rather than a short-lived crisis.
In a new report, the ratings agency said that disruptions to one of the world’s most critical energy shipping routes are increasingly looking less like a temporary shock and more like a structural risk—one that could reshape global trade, energy markets, and economic planning well beyond 2026.
The warning represents a shift in tone from earlier assessments, which had largely treated the crisis as a short-term supply disruption.
“We now have a single central scenario that assumes a prolonged and significant disruption to the Strait of Hormuz extending through the autumn,” Moody’s said.
Strait still vital to the world
The Strait of Hormuz handles around one-fifth of global crude oil and liquefied natural gas flows, making it one of the world’s most critical trade chokepoints.
However, shipping through the route has dropped by more than 90% from pre-conflict levels, as insurers raise premiums, shipping companies avoid the area, and concerns over sea mines continue to disrupt navigation.
While the conflict dominates headlines, Moody’s says the deeper issue is what happens if the disruption drags on for months.
That scenario could lead to permanently higher shipping costs, more expensive energy, slower trade flows, and a shift in global supply chain strategies as companies and governments adapt to prolonged instability in the Gulf.
“Global shipping routes are being structurally rewired,” Moody’s said. The agency added that countries are increasingly shifting toward non-Gulf energy suppliers, alternative pipeline routes, and more regionalized trade systems in an effort to reduce dependence on the Strait of Hormuz.
Higher oil prices now the norm?
Moody’s now expects Brent crude to remain in the $90–$110 per barrel range for much of the year, significantly above earlier forecasts.
For consumers, this could translate into sustained pressure on fuel prices, airfares, transport costs, and overall inflation. “Persistently higher energy prices will lead to increases in inflation and production costs, limiting household purchasing power,” Moody’s said.
The agency warned that even if a ceasefire or political agreement is reached, a return to normal conditions would still take time, as shipping backlogs, tanker repositioning, and insurance systems would likely take months to stabilise.
It also suggested that some changes triggered by the crisis may not fully reverse. “Some structural shifts in supply chain design, risk premiums and defence spending will probably be permanent,” Moody’s said.
Airlines, manufacturing risks
Industries that depend heavily on fuel and transport are among the most exposed if elevated oil prices persist.
Moody’s highlighted airlines, chemicals, and building materials companies as facing the “most acute pressure” due to high operating costs and limited ability to pass rising expenses on to customers.
Consumer-facing sectors including retail, hospitality, and manufacturing could also come under pressure if households cut spending in response to higher living costs.
“Airlines, building products and chemicals face the most acute pressure,” Moody’s said. At the same time, some sectors may benefit from the changing environment.
Energy producers outside the Gulf region, as well as aerospace and defence companies, are expected to gain from higher oil prices and rising geopolitical tensions.
Asia faces the biggest challenge
The report said Asian economies remain among the most vulnerable due to their heavy reliance on energy imports from the Middle East.
India was identified as one of the most exposed major economies, with around 46% of its crude oil imports coming from the region.
Japan and South Korea were also described as highly vulnerable, despite holding significant emergency reserves. China, meanwhile, could face pressure on industrial profitability even with state-controlled pricing and large stockpiles.
“At sustained Brent prices of $90–$110/bbl, we estimate real GDP growth reductions of 0.2–0.8 percentage point for several major economies,” Moody’s said.
Crisis the world may have to adapt to
Perhaps the key message from the Moody’s report is that the global economy may no longer be expecting a quick end to disruptions in the Strait of Hormuz.
Instead, governments, businesses, and investors are increasingly preparing for the possibility that ongoing disruption, higher costs, and elevated geopolitical risk in one of the world’s most important trade routes could become a lasting feature of the global economic landscape in the foreseeable future.
