A blockade or severe disruption in the Strait of Hormuz would test energy supply resilience by reducing crude oil and LNG availability and by raising routing, freight, insurance, port-handling, warehousing, and transport-support costs. This paper develops a short-run multi-regional input–output stress test to assess where such an energy-route shock enters the production system, how reserves and inventories reduce pass-through, which cross-border links carry residual costs, and where final demand absorbs them. Using the OECD ICIO 2025 edition for 2022, we map the shock to oil and gas extraction, refining, utilities, transport, and transport-support sectors, with an additional premium for major Gulf energy exporters. We propagate the shock for seven input–output rounds under inventory damping. First-round exposure and later-round burden do not coincide, as energy-intensive materials, aviation services, chemicals, minerals, metals, electronics, and machinery face higher downstream costs through material and logistics purchases. With 30% inventory absorption, the upstream energy shock needed for downstream manufacturing to reach a 10% added-cost threshold rises from 73.6% to 85.3%. The results support targeted reserve release, coordinated rerouting, port-logistics priority, inventory management around high-value links, and continuity protection for vulnerable sectors.
An et al. (Thu,) studied this question.
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