Chokepoints risks are a structural feature of oil and gas trade, creating recurring risks of disruption for import-dependent economies. They cannot be avoided even in well-supplied markets as supply security remains exposed to a small number of routes, and the ongoing crisis in the Middle East is just one illustration of a much bigger problem.
- Disruptions can arise not only from physical blockages, but also from “paper chokepoints”, including shipping constraints, insurance withdrawal, regulatory factors as well as climate impacts. These risks can reinforce each other and tighten markets quickly.
- E3G has developed an approach to assess how exposed major oil and gas importers – including the EU, China, Japan, South Korea, Pakistan, India, Bangladesh , Singapore and Thailand – are to chokepoint risks, and how well they are equipped to respond, based on an exposure-resilience framework. The result: no importer is safe, even though vulnerability differs across countries and regions.
- Energy security depends more on reducing exposure to disruptions than on securing supply in a geopolitically volatile and geographically constrained world. For importers, the key lever to resilience is reducing their reliance on oil and gas. While chokepoints also create risks to clean energy, these are on multi-year timescales and reduce with each new unit of renewable generation installed. By contrast exposure to oil and gas chokepoints remains a persistent feature of fossil fuel dependence.
- E3G’s analysis sets out a 5-track toolkit for countries to reduce exposure and build resilience to chokepoint risks. Short-term measures can help manage immediate shocks. But only some will help deliver longer-term benefit, while others risk amplifying the existing fossil-based structural weaknesses. In the long-term, reducing demand for imported fossil fuels and expanding clean energy offers the most durable way to limit exposure, alongside with boosting infrastructure protection and system resilience.
Story
New analysis from independent energy and climate politics think tank E3G shows that more supply of oil and LNG does not necessarily translate into greater energy security due to the persistent and unavoidable risk of chokepoints. The report assesses vulnerability across major oil and LNG importers by looking at both their exposure to chokepoints and their ability to respond to disruptions. It finds that import-dependent economies in Europe and Asia are particularly at risk.
Disruptions to trade through chokepoints can cascade quickly through global systems, as illustrated by the recent escalation around the Strait of Hormuz. Beyond the physical supply risk that chokepoints create, there are also a series of “paper chokepoints” that can tighten markets even without a full blockage via shipping constraints, insurance withdrawal, rerouting delays and risk premiums.
Because oil markets, and increasingly the LNG markets, are globally interconnected, disruption in one location can have rapid knock-on effects elsewhere, driving price volatility and competition for available cargoes. High exposure to chokepoints combined with limited short-term demand flexibility therefore creates systemic macroeconomic risk even in a period of apparent market abundance – and even for countries who are not physically dependent on chokepoints for their fossil fuel supply.
E3G’s report presents a 5-track toolkit for countries to reduce exposure and build resilience to chokepoint risks, thus decreasing their vulnerability and increasing their energy security. This toolkit sets out a broad range of immediate, medium- and long-term response measures for policymakers, identifying the short-term risk reduction and long-term structural exposure reduction that each tool delivers.
The report identifies that reducing reliance on oil and LNG – through electrification, efficiency, grids, storage and domestic clean energy – provides the most durable way to reduce structural exposure to chokepoint risk.
Quotes
Richard Smith, Senior Policy Advisor, Global Energy Transition, said:
“What we’re seeing in Hormuz isn’t a freak, one-off event. It’s an inherent and unavoidable part of the global oil and gas system. Even though we were just in an era of low price and oversupply, globally integrated fossil fuel markets leave all oil and gas consumers bracing for an inflation shock. Renewables aren’t without risk – there are also solar panels stuck in Hormuz right now. But for every solar panel that makes it through, that’s secure energy every day for a generation. Renewables and energy efficiency are the only realistic way to escape this crisis loop.”
Maria Pastukhova, Programme Lead, Energy Transition, E3G, said:
“Energy systems are a backbone of national security, but for many importers, that backbone depends on infrastructure and routes far beyond their control. Reliance on distant supply chains and chokepoints means disruption risk is built in. Clean energy systems are not immune to shocks, but they shift more of the system under domestic control and reduce exposure to geopolitical and market volatility. That is the strategic energy security lesson from this crisis.”
Madhura Joshi, Programme Lead, Global Clean Power Diplomacy, E3G, said:
“Asia receives nearly 90% of the oil and LNG transiting the Strait of Hormuz, and the consequences of prolonged disruption will be felt unevenly across the region. For India, sustained high oil prices translate directly into widening current account deficits, currency pressure, and fiscal stress that could constrain both growth and public spending. Japan and South Korea, among the world’s most LNG-dependent economies, face acute supply vulnerability with limited ability to absorb prolonged market tightness.
“This crisis makes clear that energy security for these economies cannot rest on access to the same fragile chokepoints; accelerating electrification and domestic clean energy is the most durable path to genuine resilience.”
Available for comment
Maria Pastukhova, Global Programme Lead, Energy Transition, E3G. maria.pastukhova@e3g.org (global focus)
Richard Smith, Senior Policy Advisor, Energy Transition, E3G. Richard.smith@e3g.org (particular focus on Europe)
Madhura Joshi, Programme Lead – Asia, Global Clean Power Diplomacy, E3G. Madhura.joshi@e3g.org (particular focus on S and SE Asia)
Leo Roberts, Associate Director, Energy Transition, E3G Leo.roberts@e3g.org (global focus and link with wider climate agenda)
