Iran War First 90 Days: The Biggest Ever Supply Shock in the Global Energy Market
0xBroomberg
Three months after the US-Israeli strike on Iran, the Strait of Hormuz is virtually shut; cumulative crude losses have topped 1 billion barrels, Asia faces real shortages, and the buffer keeping oil below $150 is shrinking fast.
A billion barrels lost in three months — what does that number mean?
Since the war began on February 28, transit through the Strait of Hormuz has dropped roughly 90%, cutting global output by over 10 million barrels per day.
Kpler data show cumulative Middle East crude and condensate losses reached 961 million barrels by May 22, on track to pass 1 billion by month-end.
In plain terms = the world is missing 10 million barrels every day. Over three months, that adds up to the annual output of an entire major oil-producing nation — gone.
The strait is closed — who breaks first?
The Strait of Hormuz carries roughly 20% of global oil and LNG shipments. It is now effectively shut.
Qatar halted LNG production on March 2. Iranian missiles damaged Ras Laffan — the world's largest LNG complex — and full recovery could take up to five years.
This means → the damage extends well beyond crude. The gas supply chain is broken too, and gas infrastructure takes far longer to rebuild than oil wells.
Can producers reroute? Is it enough?
Saudi Arabia has rerouted crude exports through Yanbu, a Red Sea port that bypasses the strait.
The UAE plans to expand a pipeline to Fujairah, boosting export capacity outside the strait.
Yet in just the past week, Iraq and Saudi Arabia saw another ~100,000 barrels/day potentially go offline. This reflects a hard limit: rerouting eases some pressure, but production capacity itself is also shrinking.
How long can global inventories hold?
Kpler data show onshore drawdown rates outside China accelerated from ~1.5 million barrels/day in early May to nearly 1.7 million barrels/day now.
China built a buffer of over 1.2 billion barrels beforehand; everywhere else, stocks are falling fast.
In plain terms = China has a cushion. The rest of the world does not. The buffer that previously kept prices below $150/barrel is thinning by the day.
Can summer bring more supply?
Kpler analyst Naveen Das notes that seasonal Middle East demand is rising, which may push regional supply marginally higher.
But economic reality may also trigger "organic demand destruction" — prices so high that users simply consume less — capping any summer output gains.
This means → production increases and demand collapse could happen simultaneously. With those two forces offsetting each other, the direction of oil prices remains uncertain.
Tankers are going dark — what does that signal?
Vortexa data show that switching off AIS transponders — a ship's location beacon — has spread from Iranian-linked vessels to ordinary commercial ships.
Vortexa maritime-risk director Claire Jungman said AIS shutoffs are no longer just a sanctions-evasion signal; they have become a broader commercial response to conflict risk.
This reflects a deeper problem: when clean products, LPG, and LNG all move with low visibility, refinery supply, regional inventories, and destination demand all become blind spots — making real-time tanker tracking significantly harder.
Content is for reference only, not financial advice.