The virtual closure of the Strait of Hormuz has triggered the world’s worst-ever energy crisis, reducing oil tanker traffic from 1,500 vessels per month to a trickle of just 180 in April. The blockade has removed 12% of global oil consumption and 2% of annual liquefied natural gas supplies from the market, sending petrol prices jumping by more than 70% in countries with low reserves like the Philippines and Pakistan.
Global stockpiles under stress
Commercial and strategic inventories initially cushioned the shock, but buffers are now falling at a record clip. UBS estimates that global stockpiles, which stood at 8 billion barrels in February, fell to 7.8 billion by the end of April. Analysts at JPMorgan warn that while billions of barrels remain, only about 800 million are "working volume" available before the circulation of global pipelines and tanks begins to fail.
- Inventory floor. UBS expects stockpiles to approach a record low of 7.6 billion barrels by the end of May.
- Critical threshold. Rapidan Energy predicts refined product inventories could hit critical levels by July or August, potentially causing the global economy to seize up.
- U.S. prices. American petrol has risen from $3 in February to nearly $4.60 a gallon, with forecasts suggesting a climb past $5 this summer.
Winners and losers
The economic impact has been split by geography and infrastructure. The United States and Russia have emerged as beneficiaries, with U.S. companies exporting more oil and diesel to cover global shortfalls. Russia has seen the price of its oil sold off the Gulf of Finland jump to $120 a barrel, up from $41 before the conflict, aided by a temporary lifting of U.S. sanctions in March.
In the Persian Gulf, Saudi Arabia and the UAE have mitigated losses by utilizing expensive pipelines built to bypass the strait. However, countries without alternative routes—including Iraq, Kuwait, and Qatar—have seen exports plunge. Qatar’s Ras Laffan facility, which produces a third of the world’s helium, shut down following Iranian attacks, threatening global semiconductor manufacturing in Taiwan and South Korea.
If the Strait of Hormuz remains closed through the summer, JPMorgan forecasts global oil inventories will hit a critically low level of 6.8 billion barrels by September.
