Geopolitical Pressure and the Strait of Suez Standoff-by Harold Gunatillake
The “twin arteries” of global energy and trade are often recognised as the Strait of Hormuz and the Red Sea. These essential maritime chokepoints play a crucial role in transporting oil and liquefied natural gas (LNG) from the Middle East to markets worldwide.
The tension around the Strait of Hormuz has already had a significant impact on global shipping, and the prospect of a retaliatory disruption at the Suez Canal could make matters even more challenging. Many experts refer to these two vital waterways as the “twin arteries” of world energy flow. When one encounters issues, everyone feels the effects. But when both are threatened, the consequences become far more serious.
Economic shock inside Iran
Iran’s closure of the Strait of Hormuz has led to a significant economic shock, worsening ongoing crises by blocking about a fifth of the world’s oil and gas supplies. This move deepens Iran’s difficult economic situation, leading to very high inflation and possibly pushing an additional 4.1 million people into poverty. The conflict could cause lasting harm to Iranian production facilities and has resulted in a U.S. naval blockade on Iran-related shipping.
If Iran’s oil exports face restrictions — whether due to naval tensions in Hormuz or secondary disruptions in Suez — the effects on Iran’s domestic economy could be really significant. Public reports have long indicated that:
- Iran relies heavily on crude exports for government revenue
- Inflation rises sharply when export income falls
- Electricity shortages and fuel rationing become more common during sanctions or blockades
- Ordinary citizens feel the pressure long before political elites do
China’s vulnerability
China is one of the largest importers of Iranian oil under normal conditions. Any disruption — whether caused by sanctions, naval blockades, or shipping delays — forces Beijing to:
- Seek alternative suppliers at higher prices
- Increase reliance on Russia or Gulf states
- Absorb higher manufacturing and transport costs
This creates friction in China’s own economy, especially in energy-intensive industries.
China has been actively engaging in high-level talks with Iran, working together to prevent a long-term closure of the Strait of Hormuz and to help restart at least some commercial shipping. These efforts reflect a shared desire to keep vital maritime routes open and ensure the flow of global trade.
Russia’s relative advantage- windfall
In contrast, Russia often benefits when Middle Eastern supply is constrained. Higher global oil prices strengthen Moscow’s revenue base, and reduced Iranian exports can push buyers toward Russian crude. Analysts have noted that geopolitical instability in the Gulf frequently gives Russia more leverage in global energy markets.
Russia is finding that the Strait of Hormuz blockade is actually working in its favour, turning it into a bit of a winner. Thanks to rising oil prices and greater demand for its energy exports, Russia could see an extra $3–$5 billion in revenue. As disruptions in Middle East oil supplies continue, Russia is happily increasing its oil sales to Asian markets, which helps boost its revenue. The Hill, ABC News, and the BBC have reported this encouraging news.
The rising tensions around the Strait of Hormuz and the Suez Canal are bringing noticeable changes to global energy routes, and Sri Lanka feels these shifts too. As Iran faces major challenges in its oil exports, its economy grapples with higher inflation and shortages, yet its leaders remain resilient. China, a major buyer of Iranian oil, now needs to find more costly alternatives, while Russia benefits from increasing global oil prices.
For us in Sri Lanka, these geopolitical shifts mean higher fuel prices, greater pressure on our electricity supply, and higher import costs—effects that affect our transportation, farming, and household budgets. Experts warn that ongoing unrest in these vital maritime areas could place even more strain on developing countries like ours, underscoring how conflicts far away can quickly reach the Indian Ocean and affect our daily lives.
Gulf nations, along with the US, issued a stark warning to the world over the Strait of Hormuz crisis, whilst urging Iran to reopen vital shipping lanes. UN ambassadors warned of a ‘very dangerous precedent’ as global trade, oil supplies, and maritime security face escalating threats amid Trump’s Iran war.
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