The Closed Strait of Hormuz Puts Asia’s Energy Security to the Test; the Solution Lies Across the Pacific—in Canada

Following the declaration by IRGC Brigadier-General Ebrahim Jabari that the Strait of Hormuz is closed, approximately 150 oil and LNG vessels have remained stationary to avoid the risk of attack. Major producers, including Qatar Energy, have suspended operations and invoked force majeure. The impact on Asian markets was immediate, as LNG benchmarks surged by 39% in a single day, prompting regional governments to mandate remote work to conserve energy supplies.

The vulnerability of the Asian market has been evident for some time. According to 2024 data from the U.S. Energy Information Administration, more than 80% of the oil and LNG passing through the Strait was destined for Asia, with China, India, Japan, and South Korea receiving nearly 70% of those volumes. While Saudi Arabia and the UAE possess bypass pipelines, their combined capacity of 2.6 million barrels per day is insufficient to replace the 20 million barrels currently obstructed. The situation is even more dire for LNG, which has no alternative transit routes if the Strait is blocked.

For Asian nations seeking to resolve their energy security challenges in the Middle East, the solution may lie to the east—across the Pacific in North America, specifically within Canada.

Canada’s expanding Pacific energy network, including the Shell-led LNG Canada facility in Kitimat and the expanded Trans Mountain pipeline delivering oil to Vancouver, provides Asian importers with a more efficient, economical, and secure supply route. This path completely bypasses the Strait of Hormuz and other strategic chokepoints like the South China Sea and the Strait of Malacca.

A new geographical perspective

As Robert D. Kaplan noted in his 2012 work, The Revenge of Geography, physical geography is unchangeable. The only remedy is to adopt a different strategic map—and for Asian energy consumers, that map leads to the Pacific coast of Canada.

In June 2025, LNG Canada in Kitimat, British Columbia, dispatched its inaugural shipment, marking Canada’s entry as an LNG exporter. These cargoes travel directly through the North Pacific to reach Northeast Asian ports, avoiding the geopolitical risks associated with the Straits of Hormuz and Malacca, as well as the South China Sea.

Furthermore, Canadian oil from Alberta is now transported west via the Trans Mountain Expansion (TMX) pipeline. Since becoming operational in May 2024, the project has increased capacity to 890,000 barrels per day. Exports from the Westridge Marine Terminal near Vancouver have subsequently tripled Canadian crude deliveries to international markets, with China becoming a significant purchaser.

This Alberta-to-Asia shipping route does not depend on the Strait of Hormuz or Malacca and originates from a politically stable region. Canada is considered a low-risk partner, unlikely to be embroiled in conflict in the foreseeable future.

The advantage over the United States

Despite being the top LNG exporter globally, the United States faces geographical hurdles in assisting Asian buyers. Most U.S. export terminals are located on the East or Gulf Coasts rather than the Pacific. A tanker traveling from the Gulf Coast through the Panama Canal to Japan can take up to 24 days, whereas the journey from Kitimat in Canada takes only 11 days.

According to RBN Energy, shipping Canadian LNG from Kitimat takes about 10 to 11 days at a cost of less than $1/MMBtu, compared to over $2/MMBtu for routes via Panama. The Canadian path is faster, less expensive, and avoids the congestion of the Canal.

While the U.S. is pursuing the Alaska LNG project—a massive pipeline and terminal development with support from the Trump administration and interest from companies like JERA and POSCO—it still lacks firm long-term contracts. With cost estimates exceeding $70 billion, even if construction starts in 2026, exports would not begin until 2031 at the earliest, assuming no delays.

In contrast, the first phase of LNG Canada is already operational and currently serving the Asian market.

The current opportunity

The next stage of Canadian LNG development is approaching. A final investment decision for LNG Canada’s second phase—a joint venture involving Shell, Mitsubishi, Petronas, PetroChina, and Korea Gas Corporation—is anticipated by late 2026 or early 2027, adding another 14 million tonnes of annual capacity. Additionally, the Ksi Lisims LNG project has secured necessary regulatory approvals. If these projects move forward, Canada’s Pacific export capacity could exceed 40 million tonnes per year by the early 2030s.

Asian importers and utilities—such as JERA, CNOOC, GAIL, and Singapore’s EMA—that secure 20- to 40-year contracts now will gain a strategic safeguard against future Middle Eastern supply disruptions, an investment that will likely appear very prudent in the future.

Furthermore, the Canadian government is actively supporting these partnerships as part of a strategy to diversify its energy exports beyond the United States market.

The current situation with tankers stranded near Hormuz and disruptions at facilities like Ras Laffan serves as a stark reminder of the risks involved when energy security depends on a narrow waterway controlled by a hostile power.

Asian energy buyers require a viable alternative, and Canada offers a clear solution.