The Strait of Hormuz has been under severe disruption for nearly eight weeks. About 20% of the world’s traded oil and natural gas typically passes through this single waterway between Iran and Oman. When it closes, or even partially closes, the effects don’t stay in the Middle East. They ripple outward through global supply chains, LNG markets, and eventually into the energy costs that North American businesses pay every month.

If your business has an energy contract, or if you’ve never questioned what you’re paying for electricity or natural gas, this is worth understanding.

What’s happening right now

The crisis began in late February 2026, when a military conflict between the U.S., Israel, and Iran led to Iran blocking the Strait of Hormuz to international shipping. Since then, the situation has gone through multiple phases, temporary ceasefires, brief reopenings, and renewed closures — but the core problem has remained: the world’s most important energy chokepoint is effectively blocked.

As of April 20, 2026, the strait is once again closed. Iran reversed its decision to reopen the waterway on April 18, after the U.S. refused to lift a naval blockade of Iranian ports. Ships have been fired upon. Traffic through the strait has dropped sharply, with shipments restricted by more than 90% compared to normal levels.

The International Energy Agency has called this the largest energy crisis the world has ever faced. Brent crude oil is trading above $95 per barrel today. Physical crude prices in some spot markets have been reported significantly above futures prices, according to the IEA. The IEA has also warned that some European fuel reserves could face pressure in the coming weeks.

How a crisis on the other side of the world reaches your energy bill

For business owners in Canada and the U.S., the Strait of Hormuz can feel distant. But energy markets are deeply interconnected, and there’s a clear chain of cause and effect:

  • The Hormuz disruption restricts global oil and LNG supply. Countries that depend on Gulf energy exports — particularly in Asia and Europe — scramble to source alternatives.
  • That increased competition pushes up demand for North American LNG exports. U.S. LNG feedgas flows hit an all-time record of 19.7 billion cubic feet per day in late March, according to preliminary data.
  • As more domestic natural gas is directed toward export terminals, domestic supply tightens — or at least, the balance between supply and demand shifts.
  • The spread between Henry Hub (the North American benchmark) and international gas prices has widened significantly, which can encourage more exports and put upward pressure on domestic rates over time.

Natural gas futures in the U.S. are currently trading around $2.71 per MMBtu — still relatively low compared to winter highs, partly because domestic production remains near record levels and mild spring weather has kept heating demand subdued. But the global picture is far more volatile, and markets can shift quickly.

What’s already changed

Even if your energy bill hasn’t spiked yet, several important shifts are already underway:

  • Brent crude oil has risen more than 40% compared to a year ago, which can ripple into electricity generation costs in markets that rely on oil or gas-fired power.
  • North American LNG exports are running at or near record levels, supported by the widening spread between domestic and international prices.
  • The EIA’s April 2026 Short-Term Energy Outlook projects that oil prices could remain elevated through the second quarter, with Brent forecasted to peak around $115 per barrel if disruptions persist.
  • Storage injection data shows a well-supplied domestic market for now, but the IEA has warned that prolonged disruptions could tighten balances heading into the next heating season.

The ceasefire between the U.S. and Iran is currently set to expire on April 22. What happens next could significantly affect the trajectory of global energy prices for the rest of the year.

What you can do right now

You don’t need to predict oil prices or follow geopolitics full-time. But you can take a few practical steps to better understand your energy exposure:

  • Review your current contract. Check the rate, the term, the auto-renewal clause, and the expiry date.
  • Understand your market. Is your business in a deregulated energy market? If so, you may have more options than you realize.
  • Ask questions. A conversation with an energy advisor can help you understand where you stand and whether a different strategy might be worth exploring.

Geopolitical events are outside your control. Your energy strategy isn’t.

MPN Capital Markets helps businesses across Canada and the U.S. navigate energy procurement with clarity and confidence. If you’re not sure how the current market affects your business, that’s exactly the kind of conversation we were built for.

Sources: U.S. Energy Information Administration (EIA), Short-Term Energy Outlook, April 2026 | International Energy Agency (IEA), Oil Market Report, April 2026 | American Gas Association, Natural Gas Market Indicators, April 2, 2026 | Trading Economics, Brent Crude Oil and Natural Gas prices, April 20, 2026

Disclaimer: This article is for informational purposes only and does not constitute financial, legal, or energy procurement advice. Market conditions change rapidly, and all figures cited reflect data available as of the publication date. Businesses should consult with qualified advisors before making energy procurement decisions.