U.S. President Donald Trump warned that Iran would be 'blown off the face of the earth' if it continues to target ships in the Strait of Hormuz. The threat followed a violent Monday where a fragile ceasefire appeared to unravel after Iranian drones struck the United Arab Emirates and the U.S. Navy sank Iranian vessels in the waterway. Despite the escalation, oil prices cooled on Tuesday, with Brent crude sliding 0.60% to $113.77 and WTI losing 1.35% to $105.06.
Strait remains closed
A double-blockade by both the U.S. and Iran has now choked the Strait of Hormuz for three weeks. While terrestrial bombing has paused, both nations are utilizing maritime force to disrupt traffic through the world’s most critical oil chokepoint. Chevron CEO Mike Wirth warned that the persistence of this closure is shifting the narrative from a price shock to a physical availability crisis, noting that fuel shortages are becoming a reality in certain global regions.
- Supply hit. Global oil inventories are estimated at 101 days of demand but could drop to 98 days by the end of May.
- Localized scarcity. Goldman Sachs identified South Africa, India, Thailand, and Taiwan as regions at the highest risk of product scarcity.
- Refined products. Buffers for jet fuel and petrochemical feedstocks like naphtha are being depleted rapidly as export restrictions tighten.
Regional pressure. President Trump specifically called out a South Korean cargo vessel that came under fire, suggesting it is time for South Korea to join the maritime mission. This push for international involvement comes as traders weigh the risk of immediate, large-scale supply disruptions against the current pace of inventory drawdowns. Total global stocks are expected to drift toward emergency thresholds if the blockade persists through May.
