Geography and security – what the world can expect from Azerbaijani transit

The global economy is accustomed to taking maritime communications for granted. These routes have been in use for centuries, and no one expected things to change so quickly. The strategic role of straits was only brought to light when the situation around the Strait of Hormuz, the main energy corridor of the Persian Gulf, escalated. And now, due to the advance of the Houthis, the situation around the Bab-el-Mandeb Strait and the Red Sea may spiral out of control. If the Babel-Mandeb Strait also becomes blocked, the global energy market and global logistics will fall into a coma. Bab-el-Mandeb is also the southern gateway to the Suez Canal. Goods connecting Europe with Asia, as well as significant volumes of oil and petroleum products, pass through this system.

According to the U.S. Energy Information Administration (EIA), in the second quarter of 2026, about 8.1 million barrels of oil and petroleum products per day passed through the Bab-el-Mandeb Strait, with crude oil and condensate accounting for about 6.1 million barrels. Before the start of the latest crisis in the Middle East, about 20 million barrels of oil and petroleum products per day passed through the Strait of Hormuz. This is almost a fifth of global oil consumption. The current situation has already led to a sharp reduction in flows. And in the second quarter of this year, according to the EIA, it was possible to transport only 4.9 million tons. LNG flows have also declined sharply, from 10.5 billion tons. cubic feet per day at the end of 2025 to 0.8 billion cubic meters. in the second quarter of 2026. In other words, we can say that the transit of LNG has almost come to naught.

And here a question arises: what will happen if Hormuz and Bab-el-Mandeb are closed simultaneously?

AN EXPERT’S OPINION

Ilham Shaban, an expert on economic issues and head of the Azerbaijan Oil Research Center (AORC):

"The blockage of the Strait of Hormuz would be a very serious shock for the global energy market. A significant portion of the world’s oil and liquefied natural gas trade passes through Hormuz." If we add to this the problems in the Bab-el-Mandeb Strait, which connects the Red Sea with the Indian Ocean, this will sharply increase the cost and duration of supplies. First and foremost, oil and gas prices will rise, followed by transportation and insurance costs.

But it is very difficult to make an accurate forecast for several weeks or months ahead right now. Everything will depend primarily on how long the blockade lasts and what alternative routes suppliers will be able to use. If the situation stabilizes quickly, the market will gradually calm down. If the disruptions continue, high prices may persist much longer.

As for Azerbaijan's European partners, their position in such a situation will be different. Southern Europe has a definite advantage due to the supply of Azerbaijani gas through the Southern Gas Corridor. But Azerbaijan's capabilities are limited: we cannot quickly replace large volumes of hydrocarbons that may not be available to Europe. Nevertheless, in times of crisis, even additional volumes from Azerbaijan become much more valuable.

As for the Caspian region, the current crisis is quite capable of forcing European companies to take a fresh look at investments in the region. Energy security is once again becoming no less important than the energy transition. Therefore, I would expect increased interest in Azerbaijan’s new gas projects, higher production at existing fields, and the expansion of the Southern Gas Corridor.

At the same time, I wouldn’t say that the situation will force Europe to return to its previous oil and gas policy. Rather, it’s about a more pragmatic approach: Europe will simultaneously develop green energy and seek reliable sources of oil and gas for the transitional period. And here, Azerbaijan, thanks to its geographical location and the infrastructure already in place, has a strong position.

Experts state that the Strait of Hormuz has no alternative for transporting energy resources. It cannot be replaced. And the simultaneous blockage of two straits would lead to a situation the global market has never experienced before. It would be a real logistics and energy “Armageddon”. But it won’t be limited to just these two sea routes. The Suez Canal would also be affected, which would have a serious impact, primarily on Europe. Shipping companies are already beginning to choose a route to Asia, sailing around Africa, as was the case in the old days. This is very time?consuming and expensive, which does not serve the interests of either Europe or Asia.

If everything continues according to the current scenario, a struggle for alternative routes will begin. Moreover, these will be land routes that, prior to the latest crisis, could not compete with sea transport. Special attention will be paid to routes that are outside of conflicts, passing through countries that are not involved in these conflicts in any way, maintain neutrality, and are capable of organizing transit. This list primarily includes transit routes from Central Asia and the South Caucasus.

The importance of resource-rich countries will also increase. And here, once again, we can talk about the significance of the Central Asian and South Caucasus regions.

Interest in Azerbaijan, in particular, will increase significantly. Although this country has fewer resources than Central Asia, it has a well-established and functional pipeline infrastructure required to deliver its energy resources to Europe. Central Asian countries do not have such infrastructure, except for the CPC pipeline, from whose services Kazakhstan is gradually trying to distance itself. Of course, Azerbaijan cannot replace the Gulf countries, as the scales are incomparable. Nevertheless, in the context of the crisis and the unavailability of Middle Eastern resources for European consumers, safe and reliable routes for Caspian oil and gas will be a priority.

The current situation has raised many questions. And the issue of security is one of the main ones. Today, all the cards are in the hands of those who are capable of ensuring the safe transit of goods and the supply of energy resources. It seems that Azerbaijan is among them.