Oil supply gap widens as Iran war disrupts Hormuz shipping
Updated
Updated · Bloomberg · May 5
Oil supply gap widens as Iran war disrupts Hormuz shipping
11 articles · Updated · Bloomberg · May 5
In the war's 10th week, clashes involving shipping in the Strait of Hormuz and missile attacks on the United Arab Emirates deepened the disruption.
The latest fighting has increased the market's supply shortfall and reduced expectations of any quick return to normal oil flows.
The widening gap underscores how continued conflict around a key energy chokepoint is prolonging pressure on global oil markets.
With Iran's oil revenue rising despite a US blockade, is the power of American economic sanctions fading?
The UAE has quit OPEC to challenge Saudi Arabia. Is a new energy alliance reshaping the Middle East and threatening the petrodollar?
Strait of Hormuz Closure in 2026: Global Oil Supply Cut by 90% Sparks Energy and Food Crisis
Overview
In early 2026, coordinated U.S. and Israeli strikes killed Iran's Supreme Leader, triggering Iran's swift seizure of the Strait of Hormuz and attacks on commercial vessels. This led to a 90% drop in tanker traffic, causing a major global oil supply disruption and a surge in prices from $73 to over $100 per barrel. The blockade sparked fuel shortages, soaring inflation, and a sharp economic slowdown worldwide. Efforts to bypass the strait through pipelines and regional partnerships have been limited, while diplomatic talks remain stalled. The crisis also disrupted fertilizer exports, threatening global food security, and accelerated long-term shifts toward energy diversification and geopolitical realignment.