Iran War Erases 1 Billion Barrels of Oil Supply as Hormuz Traffic Collapses 90%
Updated
Updated · OilPrice.com · May 31
Iran War Erases 1 Billion Barrels of Oil Supply as Hormuz Traffic Collapses 90%
7 articles · Updated · OilPrice.com · May 31
Kpler data show cumulative Middle East crude and condensate losses topped 1 billion barrels by the end of May, turning a year that began with oversupply into a severe global energy shock.
More than 10 million barrels a day of crude output were knocked offline after the Strait of Hormuz was effectively shut, while Qatar also halted LNG production and later warned damaged Ras Laffan capacity may take up to five years to recover.
Inventories are now draining faster: global stocks excluding China drew down at nearly 1.7 million bpd, up from just over 1.5 million bpd in early May, with shortages already emerging in Asia.
Shipping has been reshaped as Saudi Arabia reroutes exports via Yanbu, the UAE expands capacity to Fujairah, and tanker rates spike while more commercial vessels switch off transponders crossing Hormuz.
That reduced visibility is making real-time tracking of crude, fuels, LPG and LNG harder, deepening uncertainty over refinery supply, regional inventories and how high prices may climb.
With Hormuz closed, could a new Red Sea blockade trigger a complete collapse of the global energy supply chain?
Is a worldwide economic depression now the only way to balance an energy market with no spare capacity left?
As 'dark' tankers vanish from tracking systems, are we witnessing the dawn of a new, untraceable black market for global energy?
The 2026 Strait of Hormuz Shutdown: Unprecedented Oil Supply Disruption and Its Global Ripple Effects
Overview
In late May 2026, the closure of the Strait of Hormuz during the ongoing Iran War triggered a massive shock to global energy supplies. The conflict escalated as the US and Israel launched air strikes on Iran, leading to Iranian retaliation across the Middle East. This caused intensified attacks on oil and gas infrastructure, severely disrupting oil and LNG exports as the Strait—a key global energy route—was blocked. Despite efforts by Saudi Arabia and the UAE to divert oil through alternative pipelines, these measures could not fully offset the loss, resulting in soaring prices, supply shortages, and widespread economic and humanitarian impacts worldwide.