Since the outbreak of the conflict in Iran and Tehran’s declaration that the Strait of Hormuz was effectively closed, global oil markets have faced significant uncertainty regarding the actual impact on crude supply and pricing. Early assessments, based on the assumption that all non-Iranian Gulf crude exports totaling between 12 million and 15 million barrels per day were disrupted, prompted steep increases in benchmark Brent crude prices, which surged to nearly $120 per barrel in early March. Some analysts anticipated prices could climb as high as $200 per barrel, fueling inflationary concerns worldwide.
However, recent developments suggest a more complex picture. Despite Iran’s threats and initial disruptions, a substantial volume of crude oil has continued to transit the Strait of Hormuz and export channels in the Gulf of Oman. According to shipping data analyzed by firms such as Kpler, approximately 136 million barrels of non-Iranian crude passed through the region between early April and June 10—an average of around 1.9 million barrels per day. This volume indicates that alternative logistics and shipping arrangements have been established and scaled up to compensate for risks and disruptions.
Sources within the trading community report that countries including Iraq, Kuwait, and the United Arab Emirates have been exporting significant volumes of crude, sometimes with ships operating satellite systems turned off, a tactic employed both in coordination with Iran and independently. Saudi Arabia has also shifted exports to its Red Sea port of Yanbu since March, contributing an estimated 4 to 5 million barrels per day.
These adjustments have challenged initial estimates by institutions such as the International Energy Agency (IEA), which had projected a reduction of 14 million barrels per day in Gulf supply—roughly 14 percent of global output. Instead, trading sources and internal industry calculations suggest the supply shortfall may be far smaller, potentially in the range of 5 to 6 million barrels daily. For example, Iraqi exports remain below normal levels by about 2.5 to 3 million barrels per day but have not ceased altogether.
Additional market factors have also influenced the oil price dynamics. Increased U.S. crude exports, a coordinated release of 400 million barrels from international strategic reserves, and a slowdown in Chinese oil demand have collectively eased upward pressure on prices. Incorporating reduced consumption in China, one industry source estimated the actual market deficit could be closer to 2 million barrels per day.
Market analysts note that these supply adaptations have so far been effective in meeting demand, as reflected in oil prices falling below $90 per barrel despite the conflict ongoing since March. Bjarne Schieldrop, a commodity analyst at SEB, remarked that the current market conditions indicate “commercial oil markets are sufficiently supplied for now given all the ways the world has adapted to the shock.”
Nevertheless, the resilience of these workaround measures may be limited over time. Data from the U.S. Energy Information Administration shows that global oil inventories, particularly in major economies, are declining rapidly, approaching their lowest levels since at least 2003. U.S. stockpiles in key storage hubs currently total around 351 million barrels, edging closer to what analysts describe as the “danger zone” threshold of approximately 325 million barrels. This decline in reserves raises concerns about potential future price volatility should supply disruptions intensify or demand rebound sharply.