Nearly 7 Mn bpd of crude production across the Arabian Gulf has been shut in, with Saudi Arabia now cutting output by up to 2.5 Mn bpd as storage nears capacity. Additional disruptions - from vessel attacks to the sinking of Iranian mine‑laying craft - underscore the escalating risks to maritime flows in the world’s most critical oil corridor.
Despite the magnitude of the supply shock, global oil prices have remained surprisingly muted compared with historical precedents. Brent crude is significantly out of line with underlying fundamentals: while the Ukraine war once pushed prices well above USD 100 per barrel for months, today’s far larger disruption has only briefly nudged prices above that threshold.
With Saudi Arabia diverting crude from the Gulf to Red Sea outlets, overall exports remain sharply reduced, contributing to a global deficit of roughly 12–13 Mn bpd - equivalent to more than 139 Mn barrels lost in under two weeks.
Against this backdrop, the IEA is considering an unprecedented release of 300–400 Mn barrels from strategic reserves, which would cover only about 30 days of the current deficit. Markets, however, continue to trade on the assumption that the crisis is temporary. Unless the Strait of Hormuz reopens or emergency stocks are deployed at scale, sentiment may shift quickly as the supply crunch deepens, with potentially severe implications for energy markets and global trade.