Figure: Schematic map showing the geographical location of the Strait of Hormuz. This strait connects the Persian Gulf and the Gulf of Oman, serving as a critical 'chokepoint' for global energy transportation.
Event Background: In late February 2026, a US-Israel coalition launched a large-scale strike against Iran, prompting Iran to announce a blockade of the Strait of Hormuz. Approximately 20 million barrels of oil pass through this strait daily, accounting for over 20% of global demand . The blockade news triggered market panic—the risk long considered the "most severe oil supply disruption" had finally materialized. Reports indicate that three weeks into the US-Israel conflict, the narrow waterway was "completely closed to the vast majority of shipping" . Over 150 oil tankers and LNG carriers are anchored in the Persian Gulf awaiting safer passage; many shipowners and oil companies have suspended transit through the route. Iran has also issued statements threatening to attack passing vessels. Although a full blockade has not yet been enforced, the fact that "hundreds of tankers are anchored idle" indicates that regional transport is nearly paralyzed.
Soaring Oil Prices: The blockade of the Strait of Hormuz led to a sharp drop in crude oil supply, causing prices to rise sharply. On March 1st, Brent crude oil prices rose by as much as 10% to approximately $80 per barrel; in mid-to-late March, market expectations and safe-haven buying pushed prices higher, with Brent briefly approaching $110. On March 19th, influenced by attacks on Saudi refineries and strong statements from US leaders, Brent briefly rose to nearly $120 per barrel. On March 22nd, Brent was still hovering around $111, up about 55% from before the conflict. Analysts believe that if the Strait remains blocked, it is not impossible for Brent to break $150; in the long term, there is even a risk of reaching $200. Major investment banks have raised their oil price forecasts: Goldman Sachs predicts that the average Brent price in March and April will reach $110 per barrel, while Bernstein has raised its annual average price assumption to $80 and warned of the extreme possibility of prices rising to $150-$200 under continued conflict.
Figure: Due to tensions in the Strait of Hormuz, numerous oil tankers are anchored off the coast of Fujairah port, UAE, awaiting navigation clearance (Image source: AFP). The high number of idling tankers visible in the image directly illustrates the near-total halt of shipping through the strait.
Global Economic Impact: The oil price surge has triggered a chain reaction. Experts note that rising oil prices increase costs for transportation, chemicals, and manufacturing, ultimately driving up global inflation. Costs for petrochemicals, fertilizers, and related industries have surged sharply, causing volatility in the US dollar system and stock markets. Countries heavily reliant on oil imports are hit particularly hard: Japan and South Korea, which receive over 90% of their oil via the Strait of Hormuz, have experienced economic stress and frequent stock market circuit breakers. Nations like the US and in Europe, often described as living "on wheels," are also feeling the pressure, with US retail gasoline prices nearing $4/gallon, becoming a focal point for public inflation concerns and political debate. Capital markets are also volatile, as restricted trade and energy channels make investors more cautious. US financial analysts point out that this crisis "will accelerate the global structural energy transition," pushing countries to pursue oil alternatives and energy diversification.
Impact on the Cathodic Protection Industry
Rising Raw Material Costs: The Hormuz crisis has driven up prices for oil, natural gas, and coal, subsequently impacting the cost of cathodic protection materials. For instance, aluminum and magnesium, widely used for anodes, have seen prices climb, with global aluminum supply disruptions pushing aluminum to a four-year high. Similarly, prices for copper, zinc, and other metals have risen (London copper and zinc up about 0.6–0.9%). The magnesium market remains firm due to rising fuel costs for power generation: an SMM report notes that the oil conflict has increased coal prices, raising production costs for magnesium plants and leading to a slight uptick in magnesium prices. Regarding logistics, shipping disruptions have already increased sea freight rates. Overall, higher crude oil prices have driven up production and transportation costs for electrolytic magnesium, zinc, aluminum, etc., leading to a general increase in procurement prices for cathodic protection systems (anode materials, rectifiers, etc.). Additionally, the price of the precious metal iridium has risen over 70% since January, and MMO anode prices have currently doubled.
Project Delays and Engineering Costs: Cathodic protection projects are often closely tied to oil and gas infrastructure. The supply chain bottlenecks caused by this energy crisis are directly delaying material deliveries. Reports already indicate that many oil/gas companies and shippers have "suspended oil and gas transport via Hormuz." For cathodic protection, this could hinder the import of anodes (e.g., magnesium rods, aluminum alloy anodes) and power supplies (requiring long-distance transport). Project schedule delays and increased logistics costs will pressure both budgets and timelines. Conversely, maintaining the integrity of pipelines, storage tanks, and other facilities becomes even more critical during such crises, likely leading energy firms to place greater emphasis on long-term corrosion protection solutions. High oil prices and potential supply risks may force asset owners to increase investment in cathodic protection systems to extend asset lifespan and avoid more expensive repairs or leakage losses.
Manufacturers' Challenges and Opportunities
Supply Chain Pressure: The oil crisis has exacerbated logistics disruptions and cost volatility. Cathodic protection material manufacturers face dual pressures from soaring raw material prices and transport hurdles. Industry sources report that with 150 tankers anchored in the Persian Gulf, even anode materials and rectifiers that must be shipped by sea are struggling to arrive on time. Producers need more flexible procurement strategies: shortening quotation validity periods, pre-purchasing inventory, and seeking alternative supply sources. Industry players like Matcor recommend firms shorten project procurement cycles and lock in material prices promptly to counter sustained increases.
Demand Growth Opportunities: The energy sector's heightened focus on infrastructure reliability undoubtedly boosts demand for cathodic protection. On one hand, competition within the cathodic protection industry may intensify, allowing companies to highlight product quality and service advantages. On the other, high-risk environments could spur new technologies, such as advancements in new energy to reduce oil dependence.
Long-term Outlook and Countermeasures
Geopolitical Risks: The current regional conflict is far from over, especially with the US deploying amphibious assault ships to the Persian Gulf, suggesting the tense situation in Hormuz may prolong. Some analysts believe that without diplomatic de-escalation, hostilities could peak in April, impacting global energy markets even more severely. If a ceasefire or agreement is reached around June, the Strait of Hormuz could gradually return to normal operations. This uncertainty requires the cathodic protection industry to engage in long-term risk management: diversifying supply chains to avoid reliance on a single country for raw materials and having backup plans if exports from one are cut off; and strengthening international cooperation and information sharing to develop contingency plans with end clients.
Industry Resilience Building: The cathodic protection industry has weathered multiple market fluctuations, tested by events like the US-China trade friction since the 2010s and the COVID-19 pandemic, gradually enhancing the supply chain's adaptability. However, this energy shock is on a larger scale, demanding that companies focus more on comprehensive risk resistance. Examples include adopting materials with longer design life to reduce replacement frequency, improving equipment energy efficiency (lowering operating costs), and utilizing digital monitoring to detect issues early, avoiding safety hazards when logistics and repairs are hindered. The industry should also seize this opportunity to advance technical standards and testing specifications, laying groundwork for potential future market integration.
Actionable Recommendations
1. Accelerate Procurement & Inventory Management: Cathodic protection project managers are advised to initiate material procurement promptly, incorporating key anodes and power equipment into upfront budgeting.
2. Flexibly Adjust Supply Chains: Regarding logistics, collaborate with multiple shipping partners to diversify transport risks.
3. Industry Collaboration & Information Sharing: Maintain close communication with clients, suppliers, and industry associations to share the latest market and geopolitical developments and formulate joint contingency plans. If necessary, collectively convey needs to government and maritime regulatory bodies to seek solutions.
Conclusion
The blockade of the Strait of Hormuz reminds us that global energy security and industrial supply chains are deeply intertwined. While not the focal point of the conflict, the cathodic protection industry, as a crucial component of infrastructure corrosion prevention, is significantly affected. In the future, as tensions gradually ease (expected around June), oil prices will eventually rationalize. However, the lessons from this crisis are long-term: addressing cyclical risks requires strategic vision and technological innovation. Only through preemptive planning and enhanced cooperation can the cathodic protection industry maintain resilience amidst turbulence, providing reliable protection for critical energy assets.
