Hormuz Blockade Cuts Over 10% of Global Oil Output, Shell Warns of Year-Long Disruption
Updated
Updated · CNA · Jun 10
Hormuz Blockade Cuts Over 10% of Global Oil Output, Shell Warns of Year-Long Disruption
3 articles · Updated · CNA · Jun 10
Summary
More than 10% of global oil production has been removed from the market since the Middle East war began, Shell CEO Wael Sawan said, calling the resulting energy shock unlike anything previously seen.
The disruption stems from the effective shutdown of the Strait of Hormuz after US and Israeli attacks on Iran in late February, choking off roughly a fifth of global oil supplies.
Asia has been hit hardest: India, Indonesia, Thailand and Vietnam have rationed fuel, while Pakistan and the Philippines have shifted to four-day working weeks.
Shell said the damage will outlast any near-term ceasefire, with crude market rebalancing likely to take a year or longer and Qatar's Ras Laffan LNG hub not expected back until late Q1 2027.
As the Iran war cripples oil supply, will soaring fuel costs accelerate or derail the costly global shift to sustainable energy?
With strategic reserves dwindling, can the world survive an oil deficit larger than the 1970s crises for another year?
Global Oil Crisis 2026: Supply Shortfall, Strategic Reserve Depletion, and the Race for Energy Security
Overview
The global oil market is facing a severe crisis, driven by deepening supply shortfalls and the rapid depletion of strategic reserves. Ongoing conflict has disrupted key maritime routes, especially those carrying Middle Eastern oil, making the security situation highly unstable. The abrupt halt of Project Freedom and escalating tensions, such as the Houthis’ ban on Israeli ships and repeated vessel incidents, have exposed the fragility of alternative export routes like the Red Sea. These disruptions have led to dramatic fuel price shifts and highlight the urgent need for solutions as global inventories dwindle and the crisis intensifies.