Hormuz Crisis Is Raising AI Costs — What to Know

The world’s most important shipping lane is nearly shut down

The Strait of Hormuz normally handles over 100 ships per day, carrying roughly 20% of the world’s oil supply. Since late February 2026, traffic through the strait has dropped more than 90%. Last week saw just 53 transits — the most since the crisis began, but still a fraction of normal.

For small businesses using AI tools, this might seem like distant geopolitics. It is not. The energy that powers every AI model you use — every chatbot response, every generated image, every automated workflow — runs on electricity. And electricity prices are climbing fast because of what is happening in the Persian Gulf.

How energy prices affect your AI tools

The connection between a shipping lane in the Middle East and your monthly AI bill is shorter than you think.

Natural gas and oil prices have surged. Brent crude hit $126 per barrel following the disruption. European natural gas prices jumped roughly 70%, and LNG prices rose 60%. Closer to home, U.S. gasoline reached $3.99 per gallon by late March, with diesel at $5.40.

Data centers run on enormous amounts of electricity. AI workloads are projected to consume 1,050 terawatt-hours globally by 2026 — roughly equal to Japan’s entire electricity consumption. When natural gas prices rise, so does the cost of running those servers.

Those costs get passed along. Cloud providers and AI platforms build energy costs into their pricing. The IDC revised its 2026 AI growth forecast downward from 6.8% to 4.5% partly because infrastructure costs are rising faster than expected. If you pay for AI tools on a per-use or subscription basis, price increases are likely coming.

Appalachian businesses already face rising electricity costs as data center demand puts pressure on local utility rates. The Hormuz disruption adds another layer of upward pressure.

The chip supply chain connection

Energy is not the only problem. The crisis threatens the semiconductor supply chain that AI depends on.

Chip fabrication is energy-intensive. Manufacturing a single advanced semiconductor wafer requires enormous amounts of electricity, ultrapure water, and specialty chemicals — many of which rely on stable global shipping routes. Disrupted energy supplies in Asia, where most chips are fabricated, could slow production.

The $1.5 trillion bet on AI infrastructure is at risk. Tech companies committed $1.5 trillion in AI infrastructure spending based on the assumption of functional global supply chains. That assumption is now broken. Delays in building out data center capacity mean the supply of AI compute may tighten, keeping prices elevated for longer.

Shipping delays compound everything. Even components that are manufactured on time face longer delivery windows as vessels reroute around the strait or wait for the limited transit windows that Iran’s dual-corridor system allows.

What small businesses should do now

You cannot control oil prices or geopolitics. But you can make smart moves to protect your business from rising AI costs.

Lock in pricing where possible

If your AI tools offer annual pricing or committed-use discounts, this may be a good time to lock in current rates before providers adjust for higher energy costs. The difference between monthly and annual plans often widens during inflationary periods.

Audit your AI tool usage

Review which AI tools you actually use versus which ones you are paying for. Many businesses accumulate subscriptions — a content generator here, an analytics tool there — without evaluating overlap. Consolidating to fewer, more capable tools reduces exposure to multiple price increases.

Focus on high-ROI automation

Not every AI tool is equally valuable to your bottom line. Prioritize the ones that directly save labor hours or capture revenue. An AI intake widget that answers customer calls 24/7 pays for itself even if costs rise 20%. A novelty AI image tool you use once a month might not.

Watch for alternative energy strategies

Major cloud providers are pivoting to renewable and nuclear energy sources to reduce dependence on fossil fuel markets. Over time, this could stabilize or even lower AI compute costs. Platforms powered by renewable energy may offer more predictable pricing — worth considering when choosing vendors.

The bottom line

The Strait of Hormuz crisis is not just an energy story — it is an AI story. Every model, every chatbot, every automated workflow runs on electricity, and electricity just got more expensive. Small businesses that rely on AI tools will not be immune to those cost increases.

The good news: AI tools still deliver outsized value relative to their cost. Even with a 10 to 20% price increase, an AI employee that handles after-hours calls or automates scheduling still costs a fraction of the human alternative. The key is being intentional about which tools you use and locking in favorable pricing while you can.

If you are not sure where your AI spending stands or which tools deliver the most value, we can help you sort it out.