The Strait of Hormuz has remained effectively closed for over two months, forcing a massive drain on global oil stockpiles to offset a shortfall in supply equivalent to 12% of global consumption. While commercial inventories and strategic reserves cushioned the initial blow in March and April, the buffer is rapidly disappearing. UBS analysts estimate that total inventories, which stood at 8 billion barrels in February, will approach record lows of 7.6 billion barrels by the end of May.
Regional winners and losers
The energy crisis has created sharp disparities among major producers. The United States and Russia have emerged as primary beneficiaries, though for different reasons. U.S. companies have ramped up exports of oil and diesel to meet global demand, while Russia is capitalizing on a massive price surge; the price for Russian oil sold off the Gulf of Finland reached $120 a barrel in April, up from $41 before the conflict.
Conversely, Persian Gulf nations without alternative export routes are struggling. While Saudi Arabia and the UAE have used pipelines to bypass the strait, countries like Iraq, Kuwait, and Qatar remain largely trapped. In Qatar, the Ras Laffan factory—which produces one-third of the world’s helium—was forced to shut down following Iranian attacks, threatening the cooling systems of semiconductor manufacturers in Taiwan and South Korea.
Supply chain at the limit
Circulation risk. Analysts at JPMorgan warn that the oil market is approaching a "minimum working volume" required to keep pipelines and tanks functional. Out of billions of barrels in storage, only about 800 million barrels are truly available before the circulation network begins to fail. If the blockade persists, the downstream effects will continue to broaden:
- U.S. gasoline prices have jumped from $3 in February to $4.60 per gallon, with forecasts suggesting a rise above $5 this summer.
- The price of jet fuel in Europe has nearly doubled to $1,500 a tonne, prompting flight cancellations and schedule changes.
- Agricultural sectors in East Africa are facing a squeeze as 35% to 60% of fertilizer imports typically sourced from the Gulf are disrupted.
Rapidan Energy predicts that fuel product inventories could hit critical levels as early as July or August. Without a reopening of the strait, the International Energy Agency warns that severe shortages of jet fuel may hit Europe by June.
