Hormuz Disruption Cuts LNG Tanker Emissions 45%, Lifts Oil Tanker Rates
Key Facts
An analysis by the Organisation for Economic Co-operation and Development found that the closure of the Strait of Hormuz from March to May 2026 cut emissions from very large crude carriers 14% year on year, while emissions from large LNG carriers fell about 45%. The analysis offers an indication of the broader impact of the shipping disruption on energy tanker traffic, particularly LNG shipments. The organisation said emissions from large LNG carriers fell at their lowest point to about 60% below their pre-closure peak. This comes as the International Energy Agency said flows through the strait had accounted for nearly 20% of global LNG supplies. The agency said the disruption to those flows led to sharp price volatility.
Reliance on the strait was substantial for seaborne LNG trade, with the International Energy Agency linking the disruption to transit with price volatility in markets. Spot gas prices in Asia and Europe recorded their highest monthly average since January 2023 in March 2026, according to the agency. That date marks the last time the monthly average reached a similar or higher level, during the gas supply crisis of 2022 and 2023. Prices fell in the second quarter but remained well above 2025 levels. The move shows that the retreat from March's peak did not return prices to the previous year's levels. Market pressures coincided with a decline in LNG tanker traffic, according to OECD data.
On the oil side, very large crude carrier rates for departures from the Middle East to Asia in March 2026 reached their highest level since data collection began in November 2005 at the latest, according to the U.S. Energy Information Administration. This compares the rates with a series extending back to November 2005, making March's reading the highest in the period covered by the data. The figure links the shipping disruption to the cost of transporting crude on the route to Asia, without specifying a per-barrel increase. The picture is different for LNG, where the OECD reported that emissions from large carriers fell about 45% year on year after the closure. At the lowest point, emissions from those carriers were about 60% below their pre-closure peak. The separate indicators show the scale of the transport disruption, each according to the metric and period tracked by its source.
Saudi Arabia and the United Arab Emirates have pipeline routes that allow some oil flows to be diverted away from the strait. The OECD, citing the International Energy Agency, said the combined capacity of Saudi Arabia's pipeline to the Red Sea and the UAE's pipeline to the port of Fujairah is 3.5–5.5 million barrels per day. This capacity is enough to reroute about one-fifth of the oil that passed through the strait before the closure. This option gives some oil flows an alternative route, while LNG traffic that had passed through Hormuz remains tied to a sea corridor that carried nearly 20% of global supplies. The difference between the routes highlights the uneven options for rerouting oil and LNG, according to figures cited by the OECD and the International Energy Agency.
In its forecasts published during 2026, the International Energy Agency assumed the strait would fully reopen in the third quarter of the year. It also assumed that operations at undamaged regional facilities would be fully restored by the start of the fourth quarter, with LNG deliveries from Qatar and the UAE gradually ramping up between July and October. The agency tied its forecasts to these assumptions, but also pointed to continued uncertainty over the return of flows to normal levels. The July and October dates represent the period of staggered deliveries used in the agency's forecasts, not a confirmed date for supply recovery. These assumptions place the reopening of the strait and restoration of operations within a timeline spanning the second half of 2026. The path back to normal flows remained uncertain in the agency's report.