Western Hemisphere (primarily the US, Canada, Mexico, and Latin America) would suffer moderate but noticeable economic pain from a prolonged closure of the Strait of Hormuz, though far less severely than Asia or Europe. The region is a net energy exporter with strong domestic production, so it faces indirect effects through global oil price spikes rather than direct supply shortages.
Scale of the Disruption
The strait normally carries ~20 million barrels per day (b/d) of crude oil and petroleum products roughly 20% of global petroleum liquids consumption and ~25% of seaborne oil trade. It also handles a significant share of LNG (~19-20%).
Most (~80-84%) of this flow goes to Asia (China, India, Japan, South Korea). The US imported only ~0.5 million b/d from Persian Gulf sources in recent years about 2% of its total petroleum liquids consumption and a tiny fraction of its imports (which are dominated by Canada and Mexico).
In the ongoing 2026 crisis, traffic has dropped dramatically (to a trickle in many reports), triggering the largest supply shock in history per the IEA, with Gulf output cuts of ~10 million b/d and LNG flows down ~20%.
Winners Within the Region:
US, Canada, Brazil, Venezuela, Colombia: As net or growing exporters, higher prices boost revenues, drilling activity, and export earnings. Canada is exploring ways to ramp up exports to Asia/Europe. US shale and SPR releases (US contributed 172 million barrels in the recent 400-million-barrel IEA-coordinated draw) add flexibility.
Broader Effects: Shipping/insurance costs rise; some supply chain disruptions for petrochemicals, medicines, or goods with energy inputs. Latin America varies exporters gain, importers feel more pain.
Mitigating Factors for the Americas
Domestic Production: The US is a top global producer; Western Hemisphere supply (US, Canada, Brazil, Guyana, etc.) has grown significantly, reducing vulnerability.
Strategic Reserves: IEA members (including US, Canada) have released record volumes; US SPR drawdowns provide a temporary bridge (though physical limits and shipping times apply).
Alternatives: Limited Gulf bypass pipelines (Saudi East-West, UAE to Fujairah) help somewhat (~a few million b/d max combined), but not enough for full replacement. Rerouting and increased Western Hemisphere output fill gaps over time.
Resilience: Modern economies are less oil-dependent per GDP unit than in the 1970s. Short closures cause volatility; prolonged ones (months) amplify inflation/recession risks but are unlikely to cause 1970s-style lines due to market adaptations.
In summary, expect higher fuel and goods prices, some inflationary pressure, and modest growth drag noticeable for consumers and energy-intensive industries, but not catastrophic. Oil-exporting parts of the region could even see net benefits. Asia bears the brunt (shortages, much higher welfare losses). Outcomes depend heavily on duration: weeks = manageable volatility; months+ = escalating pain until flows resume or alternatives scale.
The situation remains fluid with military efforts to reopen the strait and ongoing reserve releases. For the most current localized effects (e.g., gas prices in Houston), check EIA or local fuel reports.
Grok
Trump is not going to send in troops.
