Mubasher: The companies exporting LNG and oil from the GCC countries through the Strait of Hormuz will feel the effects most acutely, said S&P Global Ratings.
In a recent statement, S&P Global Ratings noted that it looks at the potential effect of prolonged disruptions on entities in the hydrocarbon value chain with trade flows going through the strait, elaborating that Saudi and Qatari operators could be more exposed than those in the UAE.
The Strait of Hormuz is a critical global trade route for multiple commodities, including oil, liquefied natural gas (LNG), chemical and petrochemical products (including fertilizers), and aluminum.
“The intensity and the scope of military actions in the Middle East represent a major escalation in hostilities, which is directly affecting oil and gas fields, energy infrastructure, and the supply chain through physical damage or because security concerns lead companies to reduce operations,” according to S&P Global Ratings.
It added that ongoing conflicts could weaken consumer and investor sentiment at the same time, which can weigh on demand, and asset values “indirectly affecting those industries.”
Other transmission channels include trade and supply routes, energy prices and volume flow, capital flows, tourism, and population movements.
S&P Global Ratings concluded that the actual and expected duration of the Strait of Hormuz effective closure will determine the impact on global oil, gas, and petrochemical markets in terms of flows, potential disruptions, and subsequently prices, and therefore to what extent rated entities are affected by these disruptions.
It is worth noting that the Strait of Hormuz is currently experiencing an effective closure as of early March 2026. While not a formal legal blockade, the waterway has become impassable for the vast majority of global shipping due to active military threats and the withdrawal of insurance coverage.
Fitch Ratings, meanwhile, said in a 4 March statement that the effective closure of the Strait of Hormuz which is the key driver of oil price increases following the 28 February outbreak of the Iran conflict is likely to be temporary given its vital economic role. Prior to the conflict, around 20 million barrels per day (MMbpd) of crude oil and petroleum products transited the strait.
