Energy security could offset 70% of Hormuz oil loss: McKinsey
McKinsey report suggests energy security measures could offset 35-70% of oil flows from the Strait of Hormuz by 2030 during future disruptions.
A new report by the McKinsey Global Institute has revealed that strategic energy security measures could potentially offset between 35% and 70% of the oil flows passing through the Strait of Hormuz if the region faces another major disruption by 2030. While these figures represent a significant buffer, the report emphasizes that this is not a guaranteed forecast but rather a potential outcome based on the successful implementation of various global energy projects.
The Toolkit for Energy Resilience
The study highlights that the ability to mitigate a supply shock depends heavily on whether current discussions and ongoing projects are actually brought to fruition. To achieve these levels of protection, several key levers must be pulled simultaneously. These include:
- Accelerating electrification: Moving away from liquid fuels to reduce direct oil dependence.
- Developing alternative supplies: Finding new sources of oil and gas outside the traditional Gulf regions.
- Building bypass pipelines: Creating physical infrastructure to move energy around chokepoints.
- Rewiring trade flows: Changing how and where energy is traded globally.
- Managing demand and inventories: Increasing strategic reserves and optimizing how energy is consumed.
- Expanding clean energy: Shifting the global energy mix toward renewables.
McKinsey noted that the upper limit of the 70% offset potential is contingent upon the realization of numerous projects discussed following the 2026 crisis. However, the firm cautioned that "implementation takes time and money and is not a given."
Lessons from Recent Disruptions
The global energy system has demonstrated unexpected resilience in the face of recent volatility. In the fourth quarter of 2025, approximately 21 million barrels per day (MMb/d) of crude and refined products moved through the Strait. During this period, the supply-demand gap was narrowed through a combination of inventory adjustments, the use of bypass pipelines, increased supply from regions outside the Gulf, and a reduction in overall demand.
Despite this resilience, the report warns that current buffers are under significant strain. With two-thirds of all energy trade passing through maritime chokepoints and one-third crossing complex geopolitical lines, the vulnerability of the system remains high.
The Role of Bypass Pipelines and Optionality
According to the analysis, bypass pipelines could provide the largest single contribution to offsetting potential losses by 2030. It is important to note, however, that these pipelines are not intended to replace Gulf oil during periods of stability. Instead, their primary purpose is to provide optionality—offering alternative routes and additional capacity specifically when a shock occurs.
A Multi-Layered Strategy for the Future
The McKinsey report concludes that there is no "silver bullet" for energy security. Relying on a single solution is insufficient; instead, security must be built through layers of diversification, including more sources, more routes, and more buffers.
The economic implications of these shifts are vast. The report suggests that helping industrial firms adopt better energy-efficiency practices could potentially reduce industrial energy costs by as much as USD 600 billion annually. Ultimately, the goal is not necessarily to eliminate dependence entirely, but to create enough flexibility to maneuver through global energy crises.